A company owned by the brother of Sports Direct founder Mike Ashley is making an estimated £300,000 ($391,557) handling international deliveries for the discount sports retailer, according to the Financial Times.
The paper found that Barlin Delivery, a delivery broker that processes international orders for Sports Direct’s 33 overseas operations, is owned by John Ashley, brother of Mike. Around 6% of Sports Directs’ £2.9 billion in revenue comes from overseas orders and Barlin makes an estimated £300,000 a year, according to the FT.
Barlin’s headquarters are registered at a detached house in a Cleethorpes cul-de-sac, a small seaside resort on the Humber estuary in Lincolnshire, and the company does not own any trucks or employ any drivers, instead working as an intermediary that arranges delivery for Sports Direct.
The business relationship has to date not yet been disclosed despite usual rules requiring directors to detail engagements with “related parties.” Sports Direct t0ld the FT its auditors Grant Thornton decided no disclosure was necessary.
Sports Direct was unavailable for comment at the time of writing but the company told the FT:
“This structure is intended to enhance, not divert, Sports Direct’s revenues — and we believe it has that effect. From our perspective [Barlin] delivers valuable arms-length services.”
It is not the first time business relationships between Sports Direct and Mike Ashley’s immediate family have been uncovered. Last year it was revealed that the discount sports goods retailer gave the boyfriend of owner Mike Ashley’s daughter a high-level job and a £10.7 million loan.
The FT also reports that John Ashley, Mike’s older brother, ran Sports Direct’s computer systems from the 1980s until 2 years ago when he resigned his directorship.
Sports Direct has been under serious political and business pressure, with its working practices under scrutiny and performance slipping.
The retailer agreed to pay £1 million to former staff recently after admitting it had effectively paid warehouse workers less than minimum wage. That admission came after a series of press investigations and a Parliamentary inquiry that concluded conditions at Sports Direct’s warehouses were like a “Victorian workhouse.”
Sports Direct’s share price has collapsed almost 50% since the start of the year, due to the political pressure and struggling business performance.