Mike Ashley's Sports Direct defends use of casual labour

Sports Direct International, the retailer controlled by Newcastle United owner Mike Ashley, defended its treatment of workers yesterday after a newspaper report said that security checks of staff left some earning less than legal levels.
Mike Ashley's Sports Direct defends use of casual labour

The issue of lengthy security checks for agency workers at its warehouse in Shirebrook, central England, being undertaken in unpaid rather than paid time, was raised at the group’s September shareholder meeting and was the subject of an investigation by the Guardian newspaper.

Sports Direct said the process had been streamlined to reduce waiting times.

It said casual workers were an integral component of its workforce, and it complied “fully with all applicable legal requirements”.

The report was the latest in a line of criticisms of the retailer’s operations and overshadowed first-half results which saw flat revenues knock more than 12% off the share price.

In Ireland, Sports Direct is in the process of buying homeware and clothing retailer Heatons, in a €47.5m deal, which includes Heatons online sports retailer, Sportsworld.ie.

There is a dedicated SportsWorld section in 27 of the 44 Heatons stores in the Republic, with all 15 of its stores in the North already incorporating a Sports Direct concession.

In Britain, Sports Direct had been criticised for the way it treats some staff and suppliers earlier this year, with MPs saying it behaved like a “backstreet outfit”.

Chief executive Dave Forsey said Sports Direct, which trades from 455 stores in Britain, would always resolve any issues with staff, whether employed directly or through agencies.

“We don’t necessarily recognise the company that is being portrayed and we need to do a better job in making sure our story gets across,” he said.

Investor Royal London Asset management, which holds the stock, said it was concerned about corporate governance at the company, which is majority controlled by Mr Ashley.

“Until the company improves both its governance and its relationship with employees, shareholders face substantial risks,” said the firm’s corporate governance manager Ashley Hamilton Claxton.

Underlying earnings for the first six months of the year came to £218.5m (€301m), up 7.6% and in line with market forecasts, but on weaker-than-expected flat sales of £1.4bn.

Sports Direct said revenues reflected a challenging market and disappointing weather. Profits were increased by selling more of its own higher-margin brands, Mr Forsey said, and is confident it would achieve its earnings target of £420m for the year.

Mr Forsey said prospects for 2016 were also underpinned by the European Football Championships, in which England, Wales, the Republic, and Northern Ireland will compete.

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