Following a halved share price over the last six months, and a value that has fallen by £1.6bn over the last three, Sports Direct has been formally relegated from the London Stock Exchange FTSE 100.
Every quarter, a review takes place on the 100 most valuable listed firms and at close of business on Tuesday, The Guardian reported that Sports Direct was ranked at 142.
In December, a Guardian investigation revealed thousands of temporary Sports Direct warehouse workers as being underpaid, receiving hourly rates effectively below the minimum wage.
Undercover reporters employed inside the retailer’s warehouse in Shirebrook, Derbyshire, discovered thousands of workers were subject to unorthodox searches and surveillance, and that staff were terrified to take time off work.
In riposte, the sporting goods retailer announced a pay rise for staff, as well as a review of agency staff terms and conditions, which was to be overseen personally by its founder Mike Ashley.
In January, Sports Direct stunned the city when it warned that annual profits would be some £40m lower than expected.
It has denied that minimum wage law isn’t being met, but Ashley’s review in the treatment of his employees is not expected to emerge for several weeks. Meanwhile, local MPs are to visit the company’s warehouse on 21 March.
“This should be a cautionary tale for companies who treat their workers badly,” said Frances O’Grady. General Secretary of the TUC. “The reputational and financial damage Sports Direct has suffered is of its own making.
Subjecting staff to workhouse conditions is not the way to build a successful business. Shareholders must demand root and branch changes or Sports Direct’s name will continue to be dragged through the mud.”
“It is hardly surprising that Sports Direct has fallen out of the FTSE 100,” added Ashley Hamilton Claxton, Corporate Governance manager at Sports Direct shareholder Royal London Asset Management.
“Over the long term, shareholder value is intrinsically linked to corporate governance and companies ignore this at their peril. The long list of corporate governance failings at Sports Direct is a contributing factor in its fall from the FTSE 100 in our view.”