Troubles at Sports Direct continue with big fall in profits
Sports Direct has reported a big drop in half-year profits, which it blamed partly on the fall in the pound. The retailer, which has come in for heavy criticism from MPs over working conditions, said reported pre-tax profits fell 25% to £140.2m.
Chief executive Mike Ashley said the past six months had been “tough for our people and performance”.
The company also defended itself against the “extreme political, union and media campaign waged against” it.
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.”
The company’s embattled chairman, Keith Hellawell, 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.
“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.
“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.