Sports Direct chairman hits out at 'extreme campaign' as profits plunge

The company's founder Mike Ashley said profits were hit by the collapse in sterling following the Brexit vote

These were the first results since Mike Ashley took over as chief executive (PA)

The chairman of scandal-hit retailer Sports Direct has accused the media, trade unions and MPs of waging a damaging campaign against the company as the retailer reported a sharp drop in half-year profits.

Sports Direct said pre-tax profits dropped by 25 per cent to £140.2m following a calamitous period in which it has come under fire for the treatment of workers and was left badly exposed by the slump in the value of the pound after the UK voted to leave the EU.

Excluding the “exceptional gains” the company made from selling shares in JD Sports, profits slumped 57 per cent to £71.6m from £166.4m.

Keith Hellawell, the chairman of Sports Direct who survived a vote to remain in the post at the company's shareholders meeting in September, launched an attacks on critics of the retailer.

He claimed that an “extreme campaign” against the business damaged the morale of staff and influenced customers.

He said: “I have no doubt that the extreme political, union and media campaign waged against this company has not only damaged its reputation and influenced our customers, it has impacted negatively on the morale of our people.

“I begin to question whether this intense scrutiny is all ethically motivated.”

"One of the most damaging consequences has been for the very people our critics supposedly support. The board accepts responsibility for our shortcomings, but there has also been disproportionate, inaccurate and misleading commentary."

Sports Directs said it spent $51.1m (£40.3m) on a corporate jet, despite the plunge in profits.The company said the aircraft will “generate substantial operational benefits”.

The company and its founder and majority owner, Mike Ashley, have been under scrutiny due to the working conditions at its Shirebrook warehouse, including using agency staff who were employed on zero-hour contracts.

In its first results since billionaire Mr Ashley took over as chief executive from Dave Forsey, he said: "The significant events over the last year have been tough on our people and morale – our people are our number one priority over the long term."

Sports Direct said it was continuing in its efforts to become the “Selfridges” of sports retail.

"Our UK Sports Retail business continues to be the engine of Sports Direct, but our results have been affected by the significant deterioration in exchange rates, and our assessment of our risk relating to our stock levels and European stores performance," Mr Ashley added.

Speaking on Radio 4’s Today programme, Simon Walker, director general of the Institute of Directors, ackowledged the company was making changes, but that they did not go far enough.

He said: “It’s a start and it has to be a good step, but they continue to have real problems. This is a reflection on what happens when a company lets its governance systems collapse.”

Sports Direct’s shares plunged by 6 per cent in early trading.

Additional reporting by agencies