Business

Sports Direct chairman lambasts critics as profits fall

Sports Direct store Image copyright Getty Images

Sports Direct chairman Keith Hellawell has lambasted critics of the sportswear firm, saying an "extreme political, union and media campaign" has damaged its reputation.

Sports Direct also reported a big drop in half-year profits, which it blamed partly on the fall in the pound.

The retailer, which has been criticised over working conditions, said reported pre-tax profits fell 25% to £140.2m.

However, the firm added that it would be buying a corporate jet for £40m.

Chief executive Mike Ashley said the past six months had been "tough for our people and performance".

Announcing the company's results, Mr Ashley said: "Our UK sports retail business continues to be the engine of Sports Direct, but our results have been affected by the significant deterioration in exchange rates, and our assessment of our risk relating to our stock levels and European stores performance."

Morale hit

Mr Hellawell, who has been under fire during his tenure as chairman, used the results statement to launch a blistering attack on the way in which the company had been treated.

"I have no doubt that the extreme political, union and media campaign waged against this company has not only damaged its reputation and influenced our customers, it has impacted negatively on the morale of our people," he said.

"I begin to question whether this intense scrutiny is all ethically motivated. One of the most damaging consequences has been for the very people our critics supposedly support.

Image copyright Reuters
Image caption Keith Hellawell said Sports Direct's staff were "upset and angry"

"The board accepts responsibility for our shortcomings, but there has also been disproportionate, inaccurate and misleading commentary.

"The individuals at the heart of our organisation are blameless. They are increasingly upset and angry at the barrage of detrimental comments about the company, which in their view is unjustified."

Sports Direct has suffered from a number of scandals in recent months.

After HMRC looked into whether workers at its Derbyshire warehouse were paid below the minimum wage, a damning report by the the Business, Innovation and Skills committee said employees of the company were "not treated as humans".

Since the criticism over its treatment of staff began, a delegation of MPs claimed an attempt was made to record them in a private discussion while on a visit to the firm's Shirebrook warehouse.

Most recently, an investigation into the company's accounts was launched.

Several senior employees have also left the company. Dave Forsey stepped down as chief executive and was replaced by Mr Ashley.

Acting finance director Matt Pearson was replaced by another interim appointment, Herbert Monteith, in October.


Analysis: Dominic O'Connell, business presenter, Today programme

A subtle sign of the change in mindset at Sports Direct comes deep in the fine print of today's interim results.

Under the prim heading "corporate assets and facilities", the company says it is about to take delivery of a corporate plane.

Business aircraft are always a potential source of embarrassing headlines, and Sports Direct has had its fair share of those over the last year.

But finally it has shown it has learned one of the ways to avoid such headlines - be upfront about what is happening and explain it, and the sting is drawn.

Elsewhere, the company's critics were given a few sops. The veteran banker David Brayshaw has been recruited as an independent director, and may perhaps be in line to take over as chairman, should Keith Hellawell, the incumbent, not survive another vote on his tenure on 5 January.


Mr Hellawell offered to resign earlier this year, but was convinced not to by Mr Ashley.

However, after failing to receive the necessary support from a majority of the company's independent shareholders who voted at the annual general meeting in September, the chairman will stand for re-election on 5 January next year.

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