Sports Direct boss Dave Forsey insisted today that billionaire owner Mike Ashley’s decision to take himself off the company’s bonus scheme was not a rebuke of the City or a reaction to criticisms over its poor corporate governance.
He said the only reason Ashley changed his mind, just two weeks after getting shareholder approval, was because he was worried that staff were concerned over how much of their bonus pool he would get, according to the London Evening Standard.
Forsey, who spoke as the company revealed a 24% jump in sales, tempered by England’s poor World Cup performance, also defended the decision not to reveal how much of the £200 million bonus pot Ashley could take.
“The remuneration committee was left to work on the allocation and flexibility of the bonus. We got the trust and recognition from shareholders that we didn’t need to reveal the allocation… but he [Ashley] didn’t want that risk and potential negativity to hit staff,” Forsey said.
Elsewhere in the business, tensions with Adidas have started to thaw, after the supplier banned Sports Direct from selling Chelsea’s new football kit next season supposedly due to the shabby appearance of its stores.
Forsey said: “There have been very high-up meetings in the two groups and they are very encouraged with what they see, particularly with our new Oxford Street store.”
He refused to say whether the company would approach the Competition and Markets Authority to complain, but the organisation confirmed today it had not received any formal approach.
Forsey insisted shareholders would not receive a dividend until there were no further viable expansions. After that a potential special dividend could be paid.
His comments come as the retailer recorded another strong set of results, which saw sales jump 23.8% in the year to the end of April and pre-tax profits up 15.6% to £239.5 million.
Overseas acquisitions and expansions are the most-exciting areas for growth, according to the company.
Forsey said: “The sports market on the continent is worth £40 billion, eight times bigger than the UK It’s a big market across those 29 countries. We are in 19 of them... and that is a big opportunity going forward.”
Its latest UK partner, Debenhams has a strong presence in Europe and could also be seen as a possible international partner, although Forsey ruled this out until a trial in the chain’s Harrow and Southsea stores can be assessed.
Comment: Never bet against these old media moguls
Never bet against Rupert Murdoch.
After the revelation of his £80 billion for Time Warner yesterday, today comes the final extrication of BSkyB from ITV.
They may be deals differing in scale by a factor of more than 100 times but they are part of the same Murdoch game plan.
Today’s deal is also confirmation, if it were needed, that there are now just two truly global media moguls. Sky has sold its remaining stake in ITV to John Malone whose Liberty Media is to cable TV what Murdoch’s Sky is to satellite TV.
Murdoch first bought an 18% stake in ITV in 2006 to scupper Virgin Media’s ambitions to buy the commercial broadcaster and create a scaleable rival to Sky in the UK. He may have been ordered to sell down by the Competition Commission and ultimately walks away with a roughly £200 million loss, but that is a small price to pay over eight years to ensure Virgin’s ultimate sale to Liberty and preserve Sky’s power against it, ITV and the newcomer BT.
The £481 million Sky collected from the sale to Liberty will eventually find its way back into the Murdoch coffers probably through the UK business buying the Italian and German versions of Sky which are controlled by Twenty-First Century Fox.
Yet again, Murdoch’s hand looks stronger than any other player’s.