Rebel investors ‘have a point’, admits Sports Direct boss Mike Ashley
Written by Hit Music Radio News on 11/09/2019
Sports Direct’s owner Mike Ashley has admitted dissenting shareholders who voted against his re-election as chief executive “had a point”, given the strife his retail empire is currently facing.
Shareholders voted overwhelmingly in favour of his re-election as a director of the company at its annual general meeting (AGM) on Wednesday.
The company said that 90.99% of votes cast were for his continued directorship, while the remaining 9% voted against.
Approval of the company’s audited accounts for the year was also passed, with 99.8% of votes cast in favour.
Mr Ashley owns about 62% of the high street giant, and according to analysis by investment advisors PIRC, 31% of independent shareholders voted against him.
After the meeting Mr Ashley told Sky News: “Yes I agree that they have a point.
“The last three months can’t have been very comfortable for them – you’ve got a £600m Belgian tax investigation, you’ve got accountants not seeking re-election – that’s a little bit too much for most shareholders to take.”
In July, the retailer said it was facing a €674m (£605m) tax demand from Belgian authorities while management was trying to deal with problems at House of Fraser which Mr Ashley said were “terminal”.
At the time Mr Ashley warned of more store closures at the chain he acquired last summer in a £90m cash deal, expressing apparent regret for buying it, as Sports Direct published its much-delayed full-year financial results.
He said that the acquisition of House of Fraser had “led to significant uncertainty as to the future profitability of the group as a whole”.
The billionaire tycoon has a reputation for being a maverick with an unconventional style that continues to divide opinion.
Mr Ashley added after the AGM: “From when I floated everyone knew I did exactly what I said on the tin, so why would I change, I’m not necessarily wrong… we’re still going, we’re still in the fight, it might be the bottom of the 11, I might have picked myself off the canvas twice but I think I’m going to win on points.”
In the last 15 months, Mr Ashley has presided over Sport Direct’s own high street shopping spree, in which it has taken over a number of retail chains including House of Fraser, Evans Cycles, Game Digital, Sofa.com and, most recently, Jack Wills.
Sky News reported on Monday of Mr Ashley’s intention to buy struggling jewellery chain Links of London, and is currently one of two final bidders for the company.
Ahead of the AGM, Sky News also learned that Sports Direct is currently appealing with the “big four” accountants to pitch for the retail group’s audit contract, after warning that a smaller firm would be unable to perform the role.
The retail group has in the last fortnight asked the profession’s dominant firms – Deloitte, EY, KPMG and PriceWaterhouseCoopers (PwC) – to hold fresh talks, with the hope that one of them will take on the contract.
Following the AGM, a Sports Direct spokesperson said: “We remain totally focused on delivering our elevated proposition which following the AGM continues to be supported by the investor community.
“We are already seeing some exciting milestones with the acquisition of Jack Wills, the opening of the new Flannels flagship store in London and plans for Frasers now in motion.
“We are building a young and dynamic executive team to assist in this transition but making sure we retain the core values in the existing business that have allowed the business to prosper over the years.”
Mr Ashley’s re-election as chief executive follows some troubled times for Sports Direct.
© Sky News 2019