Under-fire Sports Direct boss Mike Ashley is bracing himself for a showdown with shareholders and unions at the company’s annual general meeting (AGM) today as he throws open the retailer’s factory doors to the public.
Advertisement
The Newcastle United owner and majority stakeholder of the sports retailer was made to empty his pockets as he entered the company’s Shirebrook warehouse, revealing the large, folded bundle of notes.
In a stormy meeting of the retail firm’s shareholders, Ashley responded to criticism from Steve Turner, Unite’s assistant general secretary, by saying the union was “probably” responsible for the company’s woes.
Mr Ashley and the board are standing firm in their backing for Mr Hellawell.
There have also been calls to vote against the re-election of chairman Keith Hellawell.
However, the change only applies to staff employed directly by Sports Direct. Ninety-four per cent of the 3,300 staff at its much-criticised Shirebrook warehouse are contracted through agencies and so will not benefit.
Analysts added that the confusing update had undone any positive sentiment drummed up yesterday when the company pledged to end zero-hours contracts for shop staff following a report into the company’s working practices.
He said: “Unite still has concerns over the use of the two employment agencies – The Best Connection and Transline, which supply over 3,400 workers to the Sports Direct Shirebrook warehouse”.
After an early skirmish with a Unite representative, Mr Ashley appeared genuinely repentant, not avoiding any hard questions from the press, and promising that conditions would improve.
The vote means that Sports Direct must hold another vote, in which Mr Ashley’s 55% shareholding will be included, in order for Mr Hellawell to remain as chairman.
Sports Direct’s actions to appease disgruntled shareholders follow a 55% slump in its share price over the past year.
To compound matters, the retailer said earnings are expected to come in at £300 million for the year, down from last year’s £381.4 million.
“If the headline is “Sorry” then so be it”, he said, while emphasising the sheer size of the Sports Direct operation.
He called for a “full and independent review of governance at the company” and a commitment to act on it in the next twelve months.
Ashley Hamilton-Claxton, corporate governance manager at Royal London Asset Management, which owns shares in Sports Direct, told the BBC on Wednesday: “We need fundamental change at the top and that starts with the chairman”.
Advertisement
Meanwhile it will put a workers’ representative on the board to try to ensure that all staff “are treated with dignity and respect”.
