Business

Mike Ashley: Sports Direct's media-shy owner enters spotlight

Mike Ashley Image copyright PA

Mike Ashley is one of the most intriguing characters in British business.

Entrepreneur, owner of Newcastle United, and once a possible saviour of the collapsed retailer BHS, he has been a reluctant fixture in the headlines of the business and sports pages.

But it's the treatment of workers in his Sports Direct empire that has been most controversial, and which he was called before Parliament to explain.

The retail business has produced its share of eccentric characters, and Mr Ashley is no exception. Born in Walsall, in the West Midlands, the family moved to Berkshire, where his father, a warehouse manager, loaned his 17-year-old son the money to buy his first sportswear shop.

It is now the UK's largest sportswear retailer, with more than 400 stores including the famous Lillywhites shop in London's Piccadilly.

It owns a raft of venerable sportswear brands, from Dunlop and Slazenger to Lonsdale and Karrimor, and has 270 more shops in 19 European countries.

Helicopter commute

This success has made Mr Ashley a fantastically rich man, with a fortune recently estimated at £2.4bn.

He reportedly commutes by helicopter from his north London home, complete with tennis court and swimming pool. He bought it for £12m in 2005, and it would be worth considerably more today.

Image copyright PA
Image caption Mike Ashley has built Sports Direct into the UK's largest sportswear retailer

He divorced his wife in 2003, paying out a £50m divorce settlement, and has not remarried. Marriage, he once joked, was the one of the few things he couldn't afford. Together the couple have three children.

Mr Ashley's relationship with the City started badly. He raised £929m in 2007 when he sold a 45% stake in Sports Direct on the stock market. In the following months, the shares lost half their value, with many investors unhappy at the way the company was run.

Mr Ashley called them "cry babies" in a Sunday Times interview, telling the paper: "Sports Direct should come with a government health warning - this stock is not for the fainthearted."

Complaints about the governance of the company haven't gone away. But in the next six years the share price soared, with the business promoted to the FTSE 100 index of London's biggest companies.

Zero-hours controversy

This January, however, things got more difficult. After a warning of lower profits, blamed on tough trading conditions and bad weather, the share price plunged again and the firm dropped out of the FTSE 100 in March.

Image copyright PA
Image caption The company says its zero-hours contract shop workers receive sick pay, holiday pay and bonuses

Sports Direct has been accused of building its success by exploiting workers. It has been in the frontline of the controversy for zero-hours contracts, and has been on the receiving end of a number of media exposes.

Last year a documentary film crew even went undercover in its Shirebrook distribution centre, alleging onerous security searches, strict discipline, and harsh penalties for lateness and absenteeism.

Sports Direct contested the film's findings. It has issued statements denying the use of zero-hours contracts in its warehouse, though it does use them in shops, where it claims "all parties appreciate the flexibility provided".

Its zero-hours contract shop workers receive sick pay, holiday pay and bonuses, and are not prohibited from working elsewhere, the company says.

'Media circus'

At the end of 2015, Mr Ashley hit back in an interview with the Daily Mirror, where he promised a pay rise to all staff, worth a total of £10m, pledging to become "the best high street retail employer, after John Lewis".

Image copyright Reuters
Image caption A banner was held up during a Newcastle match in January in protest against Sports Direct

He initially declined to appear before a parliamentary select committee to explain the working practices at his stores. He then changed his mind, agreeing to appear only if the MPs visited his Shirebrook HQ first.

Despite accusing them of wanting to organise a "media circus", he invited them to travel in his helicopter with TV cameras in tow.

The MPs declined, and it seemed that Mr Ashley would refuse to appear - an almost unprecedented situation, raising the bizarre prospect of a Serjeant at Arms hauling Mr Ashley in front of the Speaker of the House.

But with less than 48 hours to go, he relented, promising to defend the "good name" of Sports Direct.

During the near two-hour session, Mr Ashley told MPs that Sports Direct's policy of docking staff 15 minutes pay for being one minute late was "unacceptable", and also admitted that some workers had been effectively paid less than the minimum wage in the past.

Attacking style

Mr Ashley's ownership of Newcastle United has also not been without drama. Since his purchase in 2007, the club's progress has not been for the fainthearted.

They have been relegated, promoted, qualified for the Europa Cup, and this season, relegated once again.

It was never entirely clear why Mr Ashley bought the club, as he had no previous connection with the team or the area.

Image copyright PA
Image caption It has been a rollercoaster ride at Newcastle United under Mike Ashley's ownership

But in the early days, he would sit and cheer among the ordinary travelling Newcastle fans in his black-and-white Newcastle shirt.

He told the News of the World that he bought the club "to have fun", attracted by the gung-ho, take-no-prisoners attacking style that the team adopted under manager Kevin Keegan in the mid-1990s.

It's not a bad analogy for the way Mr Ashley runs his business. He has been accused of using the club as a way to advertise his sports gear. If so, it is an expensive ploy, as he has poured considerable sums into the club which he may never recoup.

To date, these include the club's £140m purchase price and £129m in interest-free loans.

Last May he said the club was not for sale. "I'm not going anywhere until we win something," he declared.

A punchy remark that is typical Mike Ashley.

More on this story