Sports Direct's shares slump after company delays results
Shares in Sports Direct plunged to a new eight-year low as investors reacted to the farcical scenes on Friday when Mike Ashley's company delayed its results until nearly an hour after the stock market closed.
In early trading, shares dropped by as much as 19%, before recovering to be down 9%, or 21p off at 208.8p.
Investors appeared particularly concerned with the revelation that Belgian authorities are chasing Sports Direct for a €674m (£605m) tax bill following a recent audit.
The company said it will challenge the demand, adding it was "less than probable that material VAT and penalties will be due in Belgium as result of the tax audit".
Jon Kempster, Sports Direct's chief financial officer, also resigned - just weeks after Karen Byers, head of retail, quit, and company secretary Cameron Olsen also headed for the door.
Problems at House of Fraser are so bad, Sports Direct added it would give no financial guidance for this year and would have thought again at purchasing the department store a year ago.
Independent retail analyst Nick Bubb said: "The admission that the self-inflicted problems of House of Fraser are probably 'terminal' and that it makes it impossible to provide any earnings growth target this year was unsettling, as was the news that brand relationships with Nike and Adidas have deteriorated again."
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Sports Direct has had mixed relationships with its key suppliers, with some complaining in the past that Mr Ashley's stores have been too messy and downmarket.
As a result, Mr Ashley embarked on an "elevation" programme to improve the store layout, which had some success.
But Jonathan Pritchard and John Stevenson, retail analysts at Peel Hunt, were unimpressed. They said: "Friday's delays and general nonsense weren't 'Just Mike' or slapstick, they were an exasperating means of avoiding wide analytical questioning on the very disappointing (2019).
"The home truths about the core Sports Direct business were pretty shocking and management seems to be out of ideas."