Mike Ashley has said Sports Direct is on track to become “the Selfridges of sport” ahead of an AGM today that could see the company’s chairman voted out amid shareholder frustration.
In a trading update today, Sports Direct said its outlook remained positive, with earnings growth expected to be five per cent to 15 per cent ahead of last year.
The retailer added that the performance of its “new generation flagship stores” was exceeding expectations.
It also confirmed that the Sports Direct group now owns 100 per cent of premium fashion chain Flannels.
“We remain fully focused on our strategic goal of moving our core business towards the ‘Selfridges’ of sport in order to further strengthen our proposition and drive long-term profitability,” Ashley said.
The comments were made ahead of Sports Direct’s scheduled annual general meeting (AGM) today which could see chairman Keith Hellawell ousted.
Earlier this year, Hellawell promised to step down if he did not receive the support of a majority of independent shareholders at the AGM, despite presiding over various controversies from the sportswear chain over the past year.
Royal London Asset Management and Standard Life Aberdeen have indicated they would oppose his reappointment to the chairman, while Fidelity International – which represents nearly six per cent of the business – yesterday announced it would vote against both Hellawell and his potential successor Simon Bentley.
Among the chief concerns of shareholders is Hellawell’s inability to rein in Ashley, who has seemingly been at the forefront of Sports Direct’s controversies.
Last year Ashley was grilled by MPs over “Victorian” working conditions at the retailer’s Shirebrook warehouse, before the company hosted a controversial open day at its headquarters – which saw Ashley flash a wad of £50 notes at a mock security check as part of a demonstration that was supposed to quash criticisms of workers being underpaid.
Its chief executive Dave Forsey also quit, only to be replaced by Ashley himself, who has majority ownership in the company.
Ashley has since admitted to paying some staff below the minimum wage and was taken to task over the company’s use of zero-hour contracts – but this week workers’ union Unite accused Ashley of not implementing any changes and still advertised for roles which didn’t guarantee any working hours.
Late last year, the Financial Reporting Council began investigating Sports Direct over its relationship with a business owned by Ashley’s brother.
Ashley also announced in December that Sports Direct had entered into an agreement with Double Take Limited, of which his daughter Matilda is a director.
In the meantime, profits at Sports Direct have tumbled and shareholders have become restless.
In January, Hellawell saw 54 per cent of independent shareholders vote against his reappointment and was only saved by Ashley, who owns 55 per cent of the company and whose backing meant he was re-elected with 80.92 per cent of the votes cast.
Ashley has said it would not attend today’s AGM, and also cancelled this year’s open day.