Sports Direct defends staff treatment but shares slide as profits miss expectations
Sports Direct’s chief executive Dave Forsey has come out fighting over allegations that its warehouse staff were effectively earning less than the minimum wage.
He said: “Of course we take this very seriously and we will fully review this with the board.”
Staff are searched at the end of shifts for up to 15 minutes unpaid and named and shamed over Tannoys for not working fast enough, according to a report in The Guardian. The retailer today said it had cut staff search times.
One investor accused the company of risking its share price by not addressing the problems.
Ashley Hamilton Claxton of Royal London said: “Ignoring such issues is short-sighted and runs the risk of eroding shareholder value.”
Newcastle United owner and the retailer’s majority shareholder Mike Ashley lost £246 million as shares fell 11% to 591p.
The revelations come as the company saw sales slip against its major rival, JD Sports, which last week issued a profit upgrade.
Sales in the six months to October 25 rose just 0.1% to £1.43 billion, due to a 12.2% fall in its premium lifestyle business where 24 USC stores were closed.
Pre-tax profits rose 25.1% to £187.3 million, missing expectations.
Forsey said the company would continue with acquisitions to meet targets for a senior-staff bonus, and insisted he had no plans to resign despite facing criminal proceedings after he was charged with failing to inform the authorities of redundancies over USC’s administration.
