James Moore: MySale deal opens the easy route to the land of opportunity for Ashley

Outlook: The tactic of taking a sizeable minority stake in another business as a means of forcing the target to the table to talk business is one his Sports Direct has used before

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The Independent Online

A fat finger, a tumbling share price, then a fat stake taken out by a company whose founder is apparently not unfond of the pies they sell at half-time at his football club. The Australian fashion discounter MySale has packed more news into its first few weeks as a quoted company than many more established businesses manage in months, if not years.

To explain: while grappling with the aftermath of its shares mistakenly being priced in pounds rather than pence when it floated in London – traders misread £2.26 as 2.26p, causing a rush of automatic sell orders – Mike Ashley’s Sports Direct swooped to buy a  4.8 per cent stake.

To add even more spice to the mix, the move meant Mr Ashley was sort of partnering with Sir Philip Green – the retail mega-mogul’s wife Tina owns just over 20 per cent of MySale through an offshore investment vehicle.  

But that isn’t what this was all about. Mr Ashley wanted a gateway into Australia, and he wanted MySale to provide him with it.

The tactic of taking a sizeable minority stake in another business as a means of forcing the target to the table to talk business is one his Sports Direct has used before.

You’d think a better use of shareholders’ funds  would be to just pick up the phone. But Mr Ashley and his company seem to get what they want. A similar assault on Debenhams shares, for example, led to the group offering Sports Direct concessions in its outlets.

The MySale purchase has yielded an even bigger prize because MySale has agreed to provide Sports Direct’s Antipodean gateway by way of a joint venture between the two.

At first you might wonder why the latter doesn’t simply go it alone. After all, it’s now in 19 European countries. Moreover, sportswear prices in Australia suggest that the time is right for a discounter to come in and undercut them.

Take replica Wallaby rugby tops. You’ll pay A$160, nearly £90. An equivalent England rugby shirt will cost £55. The same goes for cricket where an Australia twenty20 jersey will cost you A$120, or £66, compared with an England jersey at £37. Exchange rates can’t be the only explanation for this, and the pound has strengthened against the Aussie dollar of late. Say G’day to Sports Direct and kit like that may soon be cheaper.

But why bother taking the time and money to do something yourself if you can get it done cheaper with the help of a partner like MySale, which has nearly 12 million customers that it’s willing to let you get your hands on?

It’s true MySale will reap some benefits if Mr Ashley’s operation takes off down under as it has over here, and in large parts of Europe.

But the big winner here isn’t wearing a Wallaby top. He’s wearing the black and white stripes of Newcastle United.

Politicians and regulators share the blame for Wonga

 It looks like wonga.com is going to have to do with less of it. Wonga that is. So says Andy Haste, the payday lender’s new chairman. He has moved quickly on taking the reins at the scandal-hit company, jettisoning those ubiquitous ads featuring cutesy grandparent puppets for starters.

That will garner the headlines given their high profile and success in attracting legions of customers, many of whom clearly couldn’t afford to repay loans with even relatively modest interest charges, let alone Wonga’s near-6,000 per cent APR. 

Of more significance is that their removal is to be accompanied by a tightening of Wonga’s lending criteria together with an admission that the company is about to become a smaller, and significantly less profitable, business.

The grandiose ambitions of Errol Damelin, the man Mr Haste is replacing, to rival Apple, Amazon and Facebook have been put on ice. Probably permanently now that a cap on the charges companies such as Wonga can levy is being introduced.

In addition to shrinking the business, Mr Haste, and a new chief executive whenever they are appointed, will have to spend much of their time dealing with the wreckage left by Mr Damelin’s pursuit of those ambitions. Saying “sorry” – a word prominently displayed on Wonga’s eponymous website – may not be enough.

Apparently, Mr Haste wants to “reintroduce” Britons to a more responsible business. Your future financial health would be best served by saying thanks, but no thanks.

But let’s not forget, either, how easy it was for Wonga to get to this point and how  long it took politicians and regulators to act while Betty, Earl and Joyce tempted the foolish and the desperate into using its usurious product.

Some would say they should take responsibility for their decisions, and that’s true up to a point. Trouble is, when you’re in dire straits you’ll clutch at straws, even if they’re covered in hidden thorns. Even if you know they’re there.

Those who facilitated Wonga’s rise through their inaction should reflect on the fact this is a scandal that need never have happened.

PR firm could do with some help with communications

 When it comes to communications, Huntsworth could do with some help. The company is warning shareholders that earnings will be short of expectations. But there’s no explanation as to why this might be. And you won’t find any contact numbers at the bottom of its profit warning, sorry, trading update.

Perhaps Huntsworth should call in a PR adviser? Except that it already owns one of London’s biggest (Citigate).

If you’re a worried investor, you could try calling them. But they’re probably all in meetings.

Don’t worry, though, as they promise to get back to you.