Mike Ashley asked Sports Direct’s angry investors for a year to turn around the struggling company.
The billionaire founder of the discount sports retailer also suggested both he and embattled chair Dr. Keith Hellawell will then quit if shareholders are still unhappy.
The majority of independent shareholders voted against the re-election of Hellawell as chairman at Wednesday’s AGM, but Hellawell pledged to stay on for another year in the role. Sports Direct founder Mike Ashley’s majority shareholding means that Hellawell still had enough votes to stay.
Facing the press, Hellawell said: “My position is not untenable. The majority of shareholders in this company support me.”
But he acknowledged investor anger, saying: “I speak to shareholders regularly… clearly, as chairman of the board I’ve got to take the flack for that but they do respect my experience.”
Earlier on Wednesday Standard Life, Sports Direct’s second-biggest shareholder, said a “substantial strengthening of the non-executive members of the board will be required, particularly in the crucial role of Chairman [Keith Hellawell].” Standard Life voted against the re-election of all non-executive board members and Sports Direct’s executive pay plans.
Sports Direct has been under pressure from the press, MPs, and investors for over a year, amid scrutiny of its working practices and warehouse conditions. An investigation by the UK parliament’s Business, Innovation, and Skills Committee concluded that Sports Direct’s warehouses were run like “a Victorian workhouse.”
Shares in the company also collapsed over 10% on Wednesday morning after a profit warning and news that Ashley had refused the resignation of Hellawell over the weekend.
Mike Ashley, whose official title is executive deputy chairman, defended Hellawell saying: “Keith has experience of working with me and that experience will enable us to change things quicker.”
Ashley also insisted that he was the right man to turn around Sports Direct, despite criticism from MPs over his failings in charge. He told the press: “I have to believe that I’m the right man for the job. I do believe that I’m the right man for the job.”
He said he “got some things very right and somethings very wrong,” saying it was time for him to focus on the shortcomings.
“Obviously, [criticism in the press] hurts me personally,” Ashley said, adding: “In the end, if I keeping failing… maybe it will be best that I go. But please, give me a chance to fix things.”
Ashley and Sports Direct’s top management on Wednesday also launched a “360-degree Review” of the business aiming to “take Sports Direct in the direction of the “Selfridges” of Sports Retail (and beyond),” according to a slideshow.
Asked if he and former BHS owner Sir Philip Green were “peas in the pod,” Ashley couldn’t resist replying: “No I’m far better looking than him.”
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