Mike Ashley has warned of further losses at Sports Direct.
The Sports Direct owner and founder refused his parliamentary summons, issued by the Business, Innovation and Skills Select Committee, calling them “show boaters”. In an interview with The Times he addressed the situation, but also painted a pessimistic picture for Sports Direct’s profits this year.
“We are in trouble, we are not trading very well. We can’t make the same profit we made last year. We are supposed to be taking the profits up, they are not supposed to be coming down, and the more the media frenzy feeds on it, the more it affects us.”
“Media frenzy” aside, Sports Direct has been in dire straits for several months. It was dropped from the FTSE 100 list, and in January issued a warning to the City that its profits would be £40m lower than the previous prediction of £420m.
“Given Mike Ashley’s startling admission to the Times today that profits will be down this year, you might have expected an announcement this morning from Sports Direct revising down their profit guidance, but no such announcement has yet been forthcoming,” said Nick Bub, City retail analyst.
This could yet be another attempt by Ashley to avoid standard scrutiny, given that companies are required to reveal inside information via a “regulatory information service” as soon as possible according to UK listing rules.
The Times interview was the latest phase in the characteristically press-shy Ashley to make his voice heard amidst the controversy. He went so far as to accuse Iain Wright MP and the Committee of abusing parliamentary procedure and creating a “media circus” around his company.
Ashley is hardly the victim of unjust practice, however.
“It appears to me that, so far, the proper procedures have been followed,” said parliamentary speaker John Bercow when questioned by Smith about the committee’s actions. “As long as the committee is acting within its terms of reference the house expects witnesses to obey the committee’s order to attend.”
With Ashley having openly said he will not attend, whether the committee will proceed with its threats to hold him in contempt of parliament remains to be seen.
Referring the Guardian’s investigation, Ashley insisted that conditions at the warehouse were improved. The publication claimed that employees were bottlenecked at security for mandatory searches which could leave them trapped at work for an additional, and unpaid, hour and 15 minutes every working week.
“There is no question we had issues with security,” Ashley told The Times. “The original [warehouse] building was built 10 years ago and it was never built to cope with that many people. We had 10 times the capacity of people trying to get in and out during shift changes.”