Sports Direct said it deeply regrets “serious shortcomings” in warehouse labour practices and issued an apology in a statement yesterday, the day before what is likely to be a highly charged annual general meeting.
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An investigation by the United Kingdom parliament’s Business, Innovation, and Skills Committee concluded that Sports Direct’s warehouses were run like “a Victorian workhouse”.
The report also commits to the offer of guaranteed hours instead of “zero hours” to more than 18,000 of the firm’s casual retail staff, while the group’s HR function is being strengthened with Sports Direct’s HR team in Shirebrook bolstered by the appointment of a full-time nurse and welfare officer.
L&G Investments is also understood to have done the same at the meeting, which was held at Sports Direct’s Shirebrook HQ in Derbyshire.
They moved to depose chairman Keith Hellawell, but Mr Ashley and the board are standing firm in their backing for Mr Hellawell.
Several investor groups have questioned the amount of power wielded by Mr Ashley, who owns 55% of the group and is deputy executive chairman.
Speaking about Sports Direct’s failure to pay the National Minimum Wage to some staff, Mr Hellawell said: “We have paid back a sum to the workforce who we feel were damaged, if that’s the right word, by the process which we went through”.
A Standard Life spokesman said the investor believed Sports Direct had scale and long-term potential.
Sports Direct International will have to try again in its bid to keep its chairman as independent investors opposed his re-election on Wednesday.
The company’s Annual General Meeting saw 53% of independent investors vote against Keith Hellawell amid major criticism over working practices and the way the company is run.
There have been calls to overhaul its board of directors and launch an immediate independent review into working conditions at its factories.
“As Sports Direct expand their outlets across Northern Ireland, Unite will seek to work constructively with management to ensure it stays true to its promise to restore dignity and respect to its workers”. The Financial Times meanwhile quoted Ashley Hamilton Claxton, corporate governance manager at Royal London Asset Management, as commenting that the retailer continued “to be reckless with shareholders’ money and we are glad to see other investors join us in speaking out about poor governance within the company”.
Shareholder Hermes also said it would vote against the reappointment of Mr Hellawell.
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Sports Direct boss Mike Ashley has blamed his company’s rap sheet of failures on trade union Unite, which represents the workers he has exploited. He also said the firm was seeking to beef-up its board with new independent non-executive directors.
