The Guardian (including associated Sports Direct chat)

[forlanssister 3,050]

From The Times:

 

Mike Ashley sued over ‘broken £15m deal agreed in pub’

 

 

The billionaire founder of Sports Direct offered an investment banker £15 million if he could get the company off the City’s “blacklist” and double its share price in three years, according to claims made in a court document seen by The Times.

 

During the course of a two-and-a-half hour drinking session in the Horse and Groom pub in Great Portland Street, London in 2013, Mike Ashley agreed to “incentivise” Jeff Blue, a former Merrill Lynch banker, to repair Sports Direct’s relationship with the City, it is claimed.

 

The claim Mr Ashley conjured up a multimillion-pound incentive to boost the share price of the company over a drink in a pub will raise further concerns about the maverick retailer’s business practices, especially coming the day after the company warned on profits.

 

In a court document denying the claims, Mr Ashley admitted “a considerable amount of alcohol” was drunk that night but said that any conversation was just “banter” and denied that any agreement was made.

 

According to the High Court claim, the retail billionaire agreed to pay Mr Blue if he could double Sports Direct’s share price from just under £4 to £8, increasing the value of Mr Ashley’s stake by about £1.6 billion.

 

In Mr Blue’s account of the deal, which is contested by Mr Ashley, it was claimed that the Sports Direct founder said: “What should I do to incentivise Jeff? If he can get the stock to £8 per share why should I give a f**k how much I have to pay him [...] I will have made so much money it doesn’t matter.”

 

Initially, Mr Ashley proposed £10 million, but after Mr Blue pointed out £8 a share was a “high target” he agreed to a fee of £15 million, the document says. Three bankers from Espirito Santo were there when the pact was struck, with one said to have suggested £20 million would be more appropriate.

 

In the weeks before the alleged £15 million deal, Mr Blue had picked up the phone to old contacts and begun to rebuild Sports Direct’s relationship with the City, he claimed.

Mr Blue has worked through boom and bust in the retail sector. After leaving Merrill Lynch, he joined Baugur, the Icelandic investment group that spent billions buying prominent British retailers but collapsed under the weight of huge debts in the financial crisis.

 

After several years in the boutique financial sector, where he worked at DC Advisory Partners, he was hired by Mr Ashley in 2012.

 

In the court document it was claimed Sports Direct had hit resistance in the City in the autumn of 2012.

 

According to Mr Blue’s account of events, Merrill Lynch quit as its broker over corporate governance concerns and Citibank, Deutsche Bank, Goldman Sachs, Jefferies, JP Morgan and Nomura had all effectively blacklisted Mr Ashley’s retail empire over the “reputational risk” of doing business with Sports Direct.

 

Peter Tracey, then Espirito Santo’s head of corporate broking, had worked with Mr Blue at Merrill Lynch and was, Mr Blue claims, persuaded to meet Mr Ashley in January 2013.

 

It was the beginning of a new chapter for Sports Direct in the City. Espirito Santo was appointed as corporate broker two weeks later, with Goldman Sachs and Citibank also agreeing to work with it during the next year.

 

In Mr Ashley’s defence he admitted the appointments would be “helpful” if Sports Direct was to try to “improve its working relationship” with the City but denied it needed “rebuilding”.

 

He claimed that Mr Blue couldn’t know why various investment banks didn’t act for Sports Direct but admitted they “did not show much interest” in working with the company.

 

Between March 2013 and March 2014, BlackRock Merrill Lynch Investment Managers, Alken Asset Management, Aviva and Standard Life all put money into the retailer and its share price rose steadily until, on February 25, 2014, it closed at 808½p a share, triggering the £15 million payment, Mr Blue claims.

 

Mr Ashley denied Mr Blue’s claims and said that the reason for behindthe Sports Direct’s rising share price was not clear, adding that pointing out other investors had sold “substantial” holdings in the company overin the same period.

 

The billionaire admitted that he paid £1 million into Mr Blue’s bank account in May 2014, but claimed this was an agreed one-off bonus for his help in getting investors to approve his inclusion in a controversial £180 million Sports Direct staff share scheme.

 

Mr Blue, who left stopped working with Sports Direct in February last year, claims that the £1 million *payment was made after the pub agreement and is suing Mr Ashley for the remaining £14 million.

 

After working on Sports Direct’s London flotation he advised on a move for Blacks Leisure, the outdoor clothing company, and as well as a string of other deals in a role as head of Sports Direct’s mergers and acquisitions.

 

Sports Direct’s corporate governance has been questioned in the past. Last week it emerged that the 26-year-old boyfriend of Mr Ashley’s daughter could make millions from his a role as a consultant on the retailer’s property estate despite the former nightclub promoter’s limited experience in the industry.

 

Just after Sports Direct listed in London it was revealed that Mr Ashley had proposed a round of spoof — a game of chance popular with City traders — to settle a disputed £200,000 legal bill incurred by Merrill Lynch after it orchestrated Sports Direct’s 2007 float.

 

Sports Direct, Mr Blue and Mr Ashley declined to comment.

 

http://www.thetimes.co.uk/tto/business/industries/retailing/article4660382.ece

[SteveC 150]

http://www.themag.co.uk/2016/01/mike-ashley-losses-now-1billion-5-weeks-profits-warning-today/

 

Mike Ashley losses now £1billion in 5 weeks after profits warning today

 

Sports Direct profits warning sends share price into freefall, in last 5 weeks £1billion knocked off Mike Ashley's personal fortune.

 

The pressure is well and truly on Mike Ashley now and we can only wait and see to find out how it impacts on his relationship with Newcastle United.

 

The NUFC owner had seen a huge fall in the Sports Direct share price in early December and with him owning 330m (55.1%) of the total shareholding, the 20% that was knocked off the share price in a fortnight, represented around half a billion pounds off the value of his personal fortune.

 

However, Friday has seen things get an awful lot worse for Mike Ashley, with Sports Direct having to make a statement to the Stock Exchange, warning that annual profits will be up to £40m lower than expected, blaming tough trading on the high street and unseasonal weather in the run-up to Christmas.

 

This has sent the Sports Direct into further freefall, starting the day on 512p it is now trading as low as 429p, representing another 16% drop in the share value in only a few hours trading.

 

Taking the total drop from 2 December 2015 to today (8 January 2016), only 37 days later, it has gone from 737p to 429p, in total knocking over 40% off the share price as things stand, which represents a drop for Mike Ashley’s fortune of a cool £1billion.

 

His Sports Direct shareholding worth roughly £2.5billion at the start of December and ‘only’ £1.5billion now.

 

The shock profits warning comes just a month after the Guardian investigation that revealed Sports Direct effectively pays thousands of temporary workers below the national minimum wage of £6.70 an hour and subjects warehouse staff to a regime of searches and surveillance.

 

Mike Ashley’s response to the huge pressure that built up from MPs, pressure groups and worried shareholders, was to raise the pay of thousands of workers by 15p per hour, which when you then factor the time it can take for security checks, means that workers are just about getting the minimum wage for total time spent at Sports Direct.

 

In the stock market statement, Sports Direct said that it now expected to miss its target for underlying profits of £420m. It is forecasting that profits will now be between £380m and £420m for the year to the end of April.

 

The recent financial figures released pre-Xmas by Sports Direct looked ok in terms of profit, but the fine details instantly showed that sales had hardly moved from a year ago, with almost the entire profit figure a result of selling shares in the currently thriving rival JD Sports – how ironic is that!

 

The financial figures were preceded by the latest investigation into the dubious way the Sports Direct group operates under Mike Ashley’s leadership, with the Guardian picking up the gauntlet this time.

 

If the share price doesn’t recover, then investors who have seen 40% knocked off the value of their shareholdings, at least in part due to the negative perception of how Mike Ashley runs the business, may be more ready to make things a lot more difficult for the dominant shareholder in the future.

 

No wonder then that the Newcastle United owner has been increasingly diversifying into other areas, including property development and gyms.

 

If the Sports Direct brand is becoming ever more toxic due to its association with Mike Ashley, then as we said three weeks ago, are we nearing a point where he will be forced to take a less active role and possibly even significantly dilute his shareholding.

 

If that was the case, then the free worldwide advertising of his Sports Direct empire becomes ever less valuable to the NUFC owner and just maybe, that pledge he made to stay at Newcastle United ‘at least until 2016’ might have some relevance.

 

Some dismiss the idea that the free worldwide advertising is Mike Ashley’s biggest reason for owning Newcastle United, even though his representatives told Sir John Hall this when he bought the club, but if it is then we could be heading for a potential change of ownership that the vast majority of Newcastle fans would welcome with open arms.

[Juancornetto 1]

He's a greedy, egomaniac with the morals of a hungry snake.

[Tannochsidebear 2,315]

I am enjoying this increasing negativity in the English media (and not the sports sections either!) surrounding this scumbag and his Company. This type of growing criticism can have a real downward spiral effect on a Company to the point where it can kill them, or force huge changes in management. In a normal FTSE 100 company there would be clamour for Ashley to go, but given the iron rod and shareholding he has, he can continue to run it the way he has and stick his middle finger up at his critics.

 

The more negative stories that come out however will mean that more and more people will not buy anything inside the stores, and brands (other than the ones he owns) will not want to be associated with this company, accelarating the downward curve of trading.

 

It is entirely what this scumbag deserves and I for one am cheering it on.

[RANGERRAB 3,260]

Sports direct is now becoming a toxic brand. Once this happens it is almost impossible to reverse & the writing is on the wall.

From a once seemingly unassailable position of power,ashley now seems to be under attack from everywhere. Long term that is unsustainable

[boabie 230]

He'll be teaming up with Ratner soon.

[forlanssister 3,050]

From The Independent:

 

Mike Ashley loses £1bn as Sports Direct shares crash

 

Reviled retailer issues profit warning, sending shares down 15 per cent

 

The Sports Direct founder Mike Ashley has seen his paper fortune plummet by £1bn in the space of a month, marking one of the biggest slumps in the controversial businessman’s career.

 

The milestone was reached on a day when one top 10 Sports Direct shareholder revealed it had no faith in the chairman, the company issued a shock profit warning, analysts posed questions about the viability of its business model, and a court heard that staff at the retailer were supplied by human traffickers.

 

Shares in the company closed down 15 per cent after it informed the stock market that full-year profits would no longer hit targets, and could be as much as £40m off expectations. With shares at current levels, Sports Direct could be dumped from the FTSE 100 at the Stock Exchange’s next review in February.

 

Thousands of permanent staff are also unlikely to get life-changing bonuses, which were linked to profit targets, as the “unseasonable weather” over Christmas was blamed for a fall in trading.

 

The shares have retreated 41 per cent since 2 December, shortly before lacklustre half -year results were poorly received. Since then £1.82bn has been wiped off the company’s value, of which £1bn comes off Mr Ashley’s 55 per cent personal shareholding in the firm, leaving it worth around £1.4bn.

 

Investors and analysts warned that Sports Direct must improve operations, on the shopfloor and in the boardroom, or risk further falls, with Legal & General revealing that it voted against the election of chairman Keith Hellawell at the past two annual meetings.

 

Sacha Sadan, director of corporate governance at L&G, which has a 1.4 per cent stake in Sports Direct, said: “Legal & General Investment Management [LGIM] has had governance concerns for a long time and voted against the re-election of the chairman of the board in 2014 and 2015. LGIM believes good governance enhances shareholder value.”

 

Sports Direct is facing ever louder calls for better governance following revelations of abusive working conditions, the widespread use of zero-hours contracts, and executives hiding information from the board in relation to the administration of USC.

 

Analysts were equally scathing about Sports Direct’s performance and questioned the management’s assertions that the weather was to blame for a poor Christmas performance. Jonathan Pritchard and John Stevenson of broker Peel Hunt pointed out that rival JD Sports had issued a profit upgrade last month, and suggested the problems with Mr Ashley’s firm were more fundamental.

 

Tony Shiret, retail analyst at Haitong, and house broker to Sports Direct, urged management to reconsider its strategy of making other acquisitions.

 

Meanwhile a couple – Dariusz Parczewski, 47, and his wife, Bozena Parczewska, 46 – who supplied workers to Sports Direct appeared in court on modern slavery charges as part of an investigation into human trafficking. Both were charged with causing another person to perform forced labour. However, Sports Direct has not been accused of any wrongdoing.

 

Comment: Things have just got a lot more serious

 

James Moore, associate business editor

 

The turkeys that escaped the Christmas cull are coming home to roost at Sports Direct. Along with quite a few pigeons.

 

Having kicked off the new year with a scandal over the appointment of the nightclub promoter boyfriend of Mr Ashley’s daughter to head its international property arm, things have just got more serious.

 

The City might have overlooked that – as it has the company’s other governance issues – and there was little concern among institutions over the allegations of poor treatment and pay meted out to workers that surfaced last year. But a profit warning? That’s unforgivable. The excuses – it was all down to unseasonably warm weather –are also scarcely credible.

 

Next and M&S could plausibly claim to have been caught out by the mild spell when they reported poor sales. It wouldn’t have helped their winter ranges.

 

But Sports Direct majors on trainers, sports kit and other athletic gear. One might have expected those lines to do well in mild conditions. As they have apparently done at rival JD, which told the market to expect good things at the end of last year.

 

Those scandals I mentioned? The big investors that ignored them when the returns were good might now start to take a long hard look at what they’ve bought into. They won’t long tolerate such misbehaviour if this warning is indicative of a business that’s running out of puff.

 

 

[Oleg_Mcnoleg 50]

Grauniad's take on the banker story: http://www.theguardian.com/football/2016/jan/09/mike-ashley-sports-direct-15m-jeff-blue

Up yeez, fatty!

[ian1964 10,417]

Marmozets want their merch removed from Sports Direct

 

Sports Direct has been selling Marmozets T-shirts and the band aren’t too happy about it.

 

Writing on Facebook the band explained “Hi guys – just a quick note from us with regards to some items of our merch being stocked by Sports Direct which you notified us of yesterday.

 

We realise that for various ethical reasons some of you were disappointed that our merch was being stocked by the Sports Direct chain. Having looked into the concerns that some of our fans raised we are as upset about this as you are.

As a band we certainly didn’t make any direct arrangement for our merchandise to be stocked by the chain and we are making further enquires with our merch company to get to the bottom of how and why this has happened, as well as making immediate arrangements for stock to be withdrawn.

 

As soon as we get more information we will let you know.

Thanks for sticking with us – Becca, Jack, Sam, Josh and Will”

 

Sports Direct has been a source of almost consistent scandal over recent years including paying people below the National Minimum Wage and using “Dickensian Practices” at their warehouse in Derbyshire.

 

http://www.upsetmagazine.com/read/marmozets-want-their-merch-removed-from-sports-direct/

[MacK1950 2,231]

Another bit of aping around by SD don't accept it guys.