Sports Direct awaits verdict after sweet-talking City

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The Independent Online


Sports Direct founder Mike Ashley will find out this week if his City charm offensive has worked when the embattled retailer briefs the market with its latest trading update on Thursday.

Meanwhile, it's a busy week for retailers, with Morrisons, French Connection and Argos-owner Home Retail Group issuing numbers.

Mr Ashley was pilloried last year as shares in the company collapsed from their 2006 float price of 300p to 84.25p in December, amid weak sales and a perceived culture of secrets and weak governance. But the shares have rallied in the first part of this year.

Schroders' star fund manager, Andy Brough, was the highest- profile name to be won over, buying a near 3 per cent stake. But Nick Bubb, retail analyst at Pali International, said he was unimpressed by the recent offensive and expects further woes to be revealed by the bargain sports retailer this week.

"The share price has long been telling us something about Sports Direct," said Mr Bubb. "They have been courting investors and analysts of late, but that doesn't get people to come through the doors and spend their cash."

Sports Direct shares closed down nearly 5 per cent on Friday at just 103p.

The full extent of the retail slowdown could be revealed this week with the figures from Home Retail, Morrisons and French Connection.

"Home Retail [which issues a statement on Thursday] must be suffering but I think Morrisons is likely to show us it fared much better," said Mr Bubb. "The pressure on them will be to do something with their spare cash. They'd probably be wise to keep their balance sheet strength."

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