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Sports Direct forced to make statement after Mike Ashley outburst

5 years ago

Mike Ashley is obviously richer than you or me (unless Bill Gates or similar turns out to be a Newcastle fan and happens to be reading this…) but the pressures are building from all sides.

Ashley’s undermining comments about Newcastle United this week which blamed everybody but himself for the club’s plight and hardly helped Rafa Benitez, sounded like the words and actions of a bully looking for an easy target, as he is feeling the stress from elsewhere.

Whilst he can pretty much do whatever he wants where Newcastle United are concerned (you are ‘wedded’ to me whether you like it or not), he has to at least follow some rules elsewhere.

When you are a publicly listed company, the Stock Exchange expect things to be done in a certain way and Mike Ashley’s speaking from the hip comments about Sports Direct’s problems, didn’t go down too well yesterday.

Mike Ashley told The Times:

“We (Sports Direct) are in trouble, we are not trading very well. We can’t make the same profit as last year.

“We are supposed to be taking profits up, they are not supposed to be going down.”

The usual and proper way to release news like this is through a proper statement to the Stock Exchange and this morning Sports Direct were forced to release the following:

“Sports Direct wishes to clarify that its current expectations for adjusted underlying EBITDA (before share scheme costs) for the full year to the end of April 2016 are at or around the bottom of the range announced on 8 January 2016.”

The way Mike Ashley is talking and acting will hardly reassure investors, both because of such negative projections and the fact that he continues to act as though Sports Direct is just his personal/privately owned plaything.

City AM report Peel Hunt analysts as saying that Mike Ashley was ‘missing the point’ about the criticism of Sports Direct’s working practices:

“There’s a long list of retailers and brands accused of all manner of wrong-doing and it has very rarely had an impact on consumer behaviour. The problems at Sports Direct lie much deeper than simply a bit of mud being thrown.

“The product range is ceasing to appeal to core shoppers and rolling out larger stores to try to impress Nike and Adidas will take a long time.

“Sports Direct is in the middle of a strategic crisis and making excuses (the weather, press coverage) just pangs of denial. We expect further disappointing updates ahead: the only short term solace will come from Euro 16.”

So a bit like relying on Newcastle United’s players for his salvation at St James Park, Mike Ashley will be biting his nails as England’s perennial failures take to the pitch in France this summer.

I will still be wanting England to win but if (WHEN) they get knocked out at the first go, I won’t be shedding any tears as Mike Ashley slaps 90% off, on all his England tat.


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