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Mike Ashley: I didn't know about the problems at Sports Direct – business live Mike Ashley: I didn't know about the problems at Sports Direct – business live
(35 minutes later)
10.56am BST
10:56
Joey Barton, the oft-banned footballer, has given us an insight into Ashley’s treatment of his workers (and that helicopter).
Our sports writer Donald McRae explains:
Barton skewers Mike Ashley, Newcastle United’s owner, with a simple story. When Barton was released from prison on bail he was placed in the care of Peter Kay in Southampton – and only allowed out between 7am and 7pm. Kay had convinced the judge that, while he would counsel Barton, the footballer would be more balanced if he played the game he loved.
“Ashley offered me his helicopter,” Barton remembers, “as my curfew meant Pete and I needed to fly to and from training in Newcastle. It seemed really generous until I got an eye‑boggling invoice. It was business after all.”
10.24am BST10.24am BST
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Green Party: Government must re-open employment review Green Party: Government must reopen employment review
The Green Party hope that Sports Direct’s u-turn signals a fundamental shift towards workers rights. The Green party hope Sports Direct’s U-turn signals a fundamental shift towards workers’ rights.
They are pushing the government to breath new life into a review of working conditions, which stalled two years ago. Recent problems at Deliveroo and Uber show that workers are still being exploited, the party argues. They are pushing the government to breathe new life into a review of working conditions, which stalled two years ago. Recent problems at Deliveroo and Uber show that workers are still being exploited, the party argues.
Here’s Jonathan Bartley, their co-leader:Here’s Jonathan Bartley, their co-leader:
“Sports Direct has continually dragged its feet and tried to avoid the fully independent review into working practises that’s so desperately needed, so this announcement is as welcome as it is overdue. This is only the beginning of a process which must see the end of exploitation at Britain’s biggest sports firm. “Sports Direct has continually dragged its feet and tried to avoid the fully independent review into working practices that’s so desperately needed, so this announcement is as welcome as it is overdue. This is only the beginning of a process which must see the end of exploitation at Britain’s biggest sports firm.
“Slowly but surely we’re seeing trade unions, shareholders and campaigners force big firms to address the profound injustice being faced by so many workers in Britain. Only time will tell whether working conditions in SportsDirect’s Shirebrook warehouse – which has been compared to a Victorian workhouse – will really improve in practice. Our focus must then broaden to root out the many other firms who reaping the benefits from the so-called ‘gig economy’ at the expense of workers.” “Slowly but surely we’re seeing trade unions, shareholders and campaigners force big firms to address the profound injustice being faced by so many workers in Britain. Only time will tell whether working conditions in Sports Direct’s Shirebrook warehouse – which has been compared to a Victorian workhouse – will really improve in practice. Our focus must then broaden to root out the many other firms who are reaping the benefits from the so-called ‘gig economy’ at the expense of workers.”
“The Government must now reopen the Employment Review launched in 2014 [1] which could clarify and strengthen the employment status of up to a million British workers. In should also act quickly to crack down on employers like Sports Direct. Ending zero-hour contracts, guaranteeing trade union access to all workplaces and introducing a genuine living wage are just a few steps which would make a huge difference to millions of working people’s lives.” “The government must now reopen the Employment Review launched in 2014 [1], which could clarify and strengthen the employment status of up to a million British workers. It should also act quickly to crack down on employers like Sports Direct. Ending zero-hour contracts, guaranteeing trade union access to all workplaces and introducing a genuine living wage are just a few steps which would make a huge difference to millions of working people’s lives.”
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Reaction to Mike Ashley’s interview, and the new independent inquiry into his company, is still coming in.Reaction to Mike Ashley’s interview, and the new independent inquiry into his company, is still coming in.
Lecturer and consultant Hayley Lewis says the “I didn’t know” defence simply isn’t acceptable.Lecturer and consultant Hayley Lewis says the “I didn’t know” defence simply isn’t acceptable.
"I didn't know" is not OK reason. A good CEO will always take the time to know what's going on with employees. #leadership https://t.co/tVJucFkbUY"I didn't know" is not OK reason. A good CEO will always take the time to know what's going on with employees. #leadership https://t.co/tVJucFkbUY
(Although Ashley isn’t actually the chief executive, he does in effect run the company and owns a majority stake).(Although Ashley isn’t actually the chief executive, he does in effect run the company and owns a majority stake).
Retail analyst Paul Mitchell is more positive:Retail analyst Paul Mitchell is more positive:
Is the culture at @SportsDirectUK changing? Ashley caves into demand for independent inquiry into corporate governance. Smart move by Mike.Is the culture at @SportsDirectUK changing? Ashley caves into demand for independent inquiry into corporate governance. Smart move by Mike.
And the Daily Mail’s Henry Deedes provides the fashion angle – Ashley has produced a new tie for his big day:And the Daily Mail’s Henry Deedes provides the fashion angle – Ashley has produced a new tie for his big day:
Massive upheaval at Sports Direct . Mike Ashley has actually worn a different tie to his usual Newcastle one.Massive upheaval at Sports Direct . Mike Ashley has actually worn a different tie to his usual Newcastle one.
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The City has welcomed Sports Direct’s decision to get an independent review of its working practices.The City has welcomed Sports Direct’s decision to get an independent review of its working practices.
Shares in the company have risen by 2% this morning, making it one of the best-performing companies on the London stock market.Shares in the company have risen by 2% this morning, making it one of the best-performing companies on the London stock market.
Sports Direct share price rose 2% after agreeing to part take in an independent review of working practicesSports Direct share price rose 2% after agreeing to part take in an independent review of working practices
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Ashley's interview: What the experts sayAshley's interview: What the experts say
Labour MP Angela Rayner isn’t impressed by Mike Ashley’s defence for only paying the bare minimum to his workers:Labour MP Angela Rayner isn’t impressed by Mike Ashley’s defence for only paying the bare minimum to his workers:
Mmmmm🤔 Mike Ashley is a PR nightmare. Won't pay a living wage as gov't didn't demand it! https://t.co/y2eT7YkSFZMmmmm🤔 Mike Ashley is a PR nightmare. Won't pay a living wage as gov't didn't demand it! https://t.co/y2eT7YkSFZ
James Wilmore of Retail Week thinks Ashley’s rotten apple defence smells fishy.James Wilmore of Retail Week thinks Ashley’s rotten apple defence smells fishy.
Mike Ashley appeared to be blaming warehouse issues on 'rotten apples'. So not a cultural issue?Mike Ashley appeared to be blaming warehouse issues on 'rotten apples'. So not a cultural issue?
PR consultant Julie Fuge reckons Ashley had been coached before his ordeal on the red sofa, but he couldn’t stick to the script:PR consultant Julie Fuge reckons Ashley had been coached before his ordeal on the red sofa, but he couldn’t stick to the script:
You could see the quotes he was trained on and those where he went off piste. And he says he's never been good at PR. #sportsdirect https://t.co/GqsknEWOJqYou could see the quotes he was trained on and those where he went off piste. And he says he's never been good at PR. #sportsdirect https://t.co/GqsknEWOJq
And here’s Helen Cahill of City AM’s verdict:And here’s Helen Cahill of City AM’s verdict:
Mike Ashley went on TV this morning and it looked something like this https://t.co/PZOEtsQjUi pic.twitter.com/0Lvk3FRj4lMike Ashley went on TV this morning and it looked something like this https://t.co/PZOEtsQjUi pic.twitter.com/0Lvk3FRj4l
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Mike Ashley’s claim that a few “bad apples” caused the problems at Sports Direct doesn’t really add up.Mike Ashley’s claim that a few “bad apples” caused the problems at Sports Direct doesn’t really add up.
Two weeks ago, his own lawyers concluded that there had been “serious shortcomings” in working practices at its warehouse, for which the company apologised.Two weeks ago, his own lawyers concluded that there had been “serious shortcomings” in working practices at its warehouse, for which the company apologised.
That included the notorious “six strikes” which its agencies operated – meaning the army of casual staff at Shirebrook risked being sanctioned if they chatted too much, wore the “wrong” branded clothes, or were simply off ill.That included the notorious “six strikes” which its agencies operated – meaning the army of casual staff at Shirebrook risked being sanctioned if they chatted too much, wore the “wrong” branded clothes, or were simply off ill.
And a “bad apple” can hardly be blamed for the laborious search operations that meant staff in effect received less than the minimum wage.And a “bad apple” can hardly be blamed for the laborious search operations that meant staff in effect received less than the minimum wage.
Ashley admitted this morning that he didn’t have a firm grip on HR issues – that’s a structural failing, not a few rogue employees.Ashley admitted this morning that he didn’t have a firm grip on HR issues – that’s a structural failing, not a few rogue employees.
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Mike Ashley's interview: snap summaryMike Ashley's interview: snap summary
Mike Ashley used to have a reputation as a particularly secretive business chief (before surprisingly buying Newcastle United in 2007). So today’s outing on the BBC Breakfast sofas was a rare experience.Mike Ashley used to have a reputation as a particularly secretive business chief (before surprisingly buying Newcastle United in 2007). So today’s outing on the BBC Breakfast sofas was a rare experience.
But what did we actually learn?But what did we actually learn?
Ashley is sticking to his position that he didn’t know how workers were being mistreated across his empire. Clearly, any competent boss should have known, or at least cared, about how their main warehouse operated. But Ashley can’t be fired, as he owns more than half of Sports Direct; he can just promise to do better.Ashley is sticking to his position that he didn’t know how workers were being mistreated across his empire. Clearly, any competent boss should have known, or at least cared, about how their main warehouse operated. But Ashley can’t be fired, as he owns more than half of Sports Direct; he can just promise to do better.
He’s trying to buy himself a lot of time. Phrases like: “It’ll still need fixing when I’m dead,” suggest that Sports Direct is a kind of retailing Forth Bridge, forever dogged by peeling paint and a neverending fight against decay.He’s trying to buy himself a lot of time. Phrases like: “It’ll still need fixing when I’m dead,” suggest that Sports Direct is a kind of retailing Forth Bridge, forever dogged by peeling paint and a neverending fight against decay.
He’s playing for public support. Ashley claims to be a PR nightmare – then tantalises the audience by revealing that he paid a cleaning lady an £80k bonus. What a decent chap, eh?He’s playing for public support. Ashley claims to be a PR nightmare – then tantalises the audience by revealing that he paid a cleaning lady an £80k bonus. What a decent chap, eh?
But the mask did slip… Ashley was on his very best behaviour (unlike at this month’s AGM when he lashed out at the unions). But towards the end of the interview, he basically claimed it was the government’s fault that Sports Direct paid its workers so little, as they set the minimum wage.But the mask did slip… Ashley was on his very best behaviour (unlike at this month’s AGM when he lashed out at the unions). But towards the end of the interview, he basically claimed it was the government’s fault that Sports Direct paid its workers so little, as they set the minimum wage.
Someone should probably remind Mike that he’s allowed to pay more than the legal minimum …Someone should probably remind Mike that he’s allowed to pay more than the legal minimum …
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Ashley: Our cleaning lady got an £80k bonusAshley: Our cleaning lady got an £80k bonus
Q: Are you confident that, five years down the line, Sports Direct will be a very different place to the “Victorian workhouse” conditions workers have suffered?Q: Are you confident that, five years down the line, Sports Direct will be a very different place to the “Victorian workhouse” conditions workers have suffered?
Ashley: In the last five years, Sports Direct have paid out more than £200m in bonuses.Ashley: In the last five years, Sports Direct have paid out more than £200m in bonuses.
The cleaning lady got an £80,000 bonus on top of her normal pay. No ne in the UK has done that.The cleaning lady got an £80,000 bonus on top of her normal pay. No ne in the UK has done that.
We need to get the bits we’ve got wrong up to the level of the extreme bits we’ve got right, Ashley adds.We need to get the bits we’ve got wrong up to the level of the extreme bits we’ve got right, Ashley adds.
And he concludes with a pledge to get the job done:And he concludes with a pledge to get the job done:
Clearly I’ve taken my eye off the ball. I’ve said sorry, I’ve said I’m going to fix it and I will.Clearly I’ve taken my eye off the ball. I’ve said sorry, I’ve said I’m going to fix it and I will.
And that’s the end of the BBC interview.And that’s the end of the BBC interview.
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Ashley then defends his use of private planes and helicopters to do business, saying it’s wrong to compare his lifestyle to an ordinary worker’s.Ashley then defends his use of private planes and helicopters to do business, saying it’s wrong to compare his lifestyle to an ordinary worker’s.
I don’t get paid a salary, but I do like to go by private plane – it saves a lot of time and is very efficient.I don’t get paid a salary, but I do like to go by private plane – it saves a lot of time and is very efficient.
Then people say: ‘How can you have a plane when your workers are on minimum wage?’.Then people say: ‘How can you have a plane when your workers are on minimum wage?’.
I don’t set the minimum wage, Ashley adds, arguing that if the minimum wage should be the living wage, then the government should set it at that level.I don’t set the minimum wage, Ashley adds, arguing that if the minimum wage should be the living wage, then the government should set it at that level.
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Now on to Ashley’s public relations gaffe last week, when he produced a massive wad of £50 notes during a security search at his factory.Now on to Ashley’s public relations gaffe last week, when he produced a massive wad of £50 notes during a security search at his factory.
Q: Wasn’t that a massive PR disaster?Q: Wasn’t that a massive PR disaster?
That’s why I’ve never tried to do PR, Ashley grins. I’m a nightmare for PR.That’s why I’ve never tried to do PR, Ashley grins. I’m a nightmare for PR.
He explains that no one asked me to check his pockets “in case I’d just been to the casino”, before he had to empty his pockets in front of a crowd of journalists.He explains that no one asked me to check his pockets “in case I’d just been to the casino”, before he had to empty his pockets in front of a crowd of journalists.
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Ashley: Fixing Sports Direct will never stop
Now we move on to Mike Ashley’s future at the company he founded.
Q: Your reputation is on the line here – so how long are you giving yourself to turn Sports Direct around?
Ashley says that he’s trying to improve Sports Direct’s stores, and also fix the problems on the personnel side.
We want a culture of being One Sports Direct family.
Q: So if you haven’t done that in a year, you’ll go?
Ashley rebuffs this timescale, insisting that “a year is too soon” to fix everything that’s wrong.
Instead, it sounds like a neverending task. Ashley says:
You get to the top of a mountain and then you see there’s another mountain. It will never stop. Even when I’m dead it will never stop.
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Ashley: I should have done better
With hindsight, I should have done a better job overseeing corporate governance and HR issues, Mike Ashley admits.
Q: How can you make serious changes, though, when you have exactly the same board in place?
Ashley says that he’s now taking a more hands-on role.
He insists the board is absolutely serious about turning the company around, pointing out that CEO Dave Forsey lost a bonus worth almost £4m last year.
Q: Why are you only offering workers just 12 hours’ work a week (rather than a zero-hours contract)?
People who already work a full working week will continue to do so if they take a new contract, Ashley promises.
We’re trying to get people into two categories – those who want a minimum guarantee each week and those who don’t, he adds.
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Q: So were you appalled when you heard what was happening?
My initial reaction was that these things couldn’t be happening at Sports Direct, Mike Ashley says.
He argues that Sports Direct has suffered from “odd isolated instances”, the “rotten apple in the barrel” which needs to be dug out.
Q: Isn’t your reputation in tatters?
Askley repeats his line that a few “rotten apples” are to blame
8.16am BST
08:16
Mike Ashley: I didn't know what was going on
Mike Ashley is speaking on BBC One now.
Q: Isn’t it incredibly damaging that MPs have decribed your warehouse conditions as “Victorian”?
Undoubtedly yes, says Mike Ashley. There were definitely some things we had to fix – we’ve fixed some over the first 90 days, but there’s more to fix, and some things that will always need fixing.
Q: You’re the founder of this company – didn’t you know what was going on?
You’d be surprised how little I knew – and that’s where the failing was, says Ashley.
He explains that he can’t watch every night shift, or see what’s happening at his company during the weekend.
There’s lots of hours in the week when I’m not there, he adds.
Should I known more, yes? Did I know what was happening? Absolutely not.
Sports Direct boss Mike Ashley tells @BBCBreakfast 'you'd be surprised at how little I knew of what was going on in the warehouse.' pic.twitter.com/buf7Pz5J0M
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Sports Direct says it has already fixed some of the serious problems at Shirebrook, such as the security searches conducted after workers’ paid shifts have ended.
But the independent team will want to check whether the other problems, which led to Shirebook being labelled “the gulag” are being addressed:
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Sports Direct’s decision is being welcomed as a major win for shareholders and campaigners.
Here’s Ian Smith of Investors Chronicle:
A win for shareholders as Sports Direct decides independent review of its working practices will now not be carried out by legal adviser RPC
All Sports Direct staff will vote in the election of a worker representative to the board. It's that shareholder society a-coming
Deirdre Hipwell of the Times says it’s a major climbdown by Mike Ashley:
A big climb down from sports direct this morning.retailer says it will allow an independent party to carry out a review of governance
Antonia Bance, head of campaigns at the TUC union, is also pleased:
Well done @unitetheunion! Mike Ashley announces *independent* review of working practices at Sports Direct! #r4today
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Sports Direct agrees to independent review
Big news from Sports Direct this morning – the retailer has agreed to hold an independent review of its working practices and corporate governance.
This looks like a U-turn from founder Mike Ashley. He had originally planned to use his own lawyers, RPC, to conduct the inquiry, but has been pressured by large shareholders to get a fully independent team involved instead.
Today the company bowed to that pressure, telling shareholders that:
Sports Direct today announces that the forthcoming ‘360-degree’ review of working practices and corporate governance which was announced on 6 September 2016 and which was to be led by RPC will now be led by an independent party other than RPC.
RPC has already conducted one review of Sports Direct, which concluded there were serious deficiencies in the way its workers were treated. Ashley has promised to put things right, after seeing a major City backlash against his chairman following the revelations.
Here’s our news story on today’s announcement:
We’re expecting to hear from Mike Ashley shortly, on the BBC 1 Breakfast show…
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GSK names female CEO
Newsflash: the City is getting another female chief executive.
Pharmaceuticals giant GlaxoSmithKline has promoted Emma Walmsley, currently the head of its Consumer Healthcare division, to replace Andrew Witty as CEO.
It makes her the most powerful woman in the City, I reckon – at £80bn, GSK is the sixth-largest company on the FTSE 100.
Today we’ve announced Emma Walmsley will succeed Sir Andrew Witty as CEO of GSK. Read more: https://t.co/amyuIRK1uJ pic.twitter.com/Z7awbyPKt3
Walmsley says:
I am delighted and honoured to be appointed GSK’s next CEO. GSK is a company that leads both in science and in the way it does business.
We have momentum in the group and as the demand for medical innovation and trusted healthcare products continues to rise, we have the opportunity and the potential to create meaningful benefits for patients, consumers and our shareholders. I’m looking forward to working with Andrew and other leaders over the next few months to ensure a smooth handover and to develop plans for 2017 and beyond.
There are currently just five women running FTSE 100 companies, I reckon.
Here’s some reaction from the GSK workforce:
Brilliant! Proud to work for a company who has a female CEO.@sherylsandberg @Arianahuff https://t.co/7WgU86oi2l
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The agenda: markets await central bank Wednesday
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
After yesterday’s rally, Europe’s stock markets look remarkably subdued this morning. Investors are waiting nervously for tomorrow’s splurge of central bank news, with the Bank of Japan and the US Federal Reserve setting monetary policy.
The markets reckon there’s only a 20% chance that the Fed will hike interest rates, but a shock can’t be ruled out. And no one’s really confident about which way the Bank of Japan might jump.
Analysts at Danske Bank predict that Japan will shake up its stimulus programme a little:
We do not expect the BoJ to ease monetary policy as such but expect it to adjust its policy framework by (1) changing its wording on when it expects to achieve its 2% inflation target and (2) adding some flexibility to its government bond purchase programme while maintaining its negative interest rate policy.
Due to those pesky timezones, most of Europe will be tucked up in bed when the BoJ does its thing. So trades have an edgy day ahead…
We are called flat at the start of trading in Europe https://t.co/PinxrfO474 pic.twitter.com/FVdtwX1UQs
Also coming up today....
UK companies Kingfisher (which runs that B&Q DIY chain) and French Connection are reporting to the City.
On the economic front, the latest German producer prices figures are out – showing that factories charged less for their goods last month. That suggests eurozone inflation remains subdued.
Nein! Deflation ist back. German PPI -0.1% in Aug vs flat est v +0.2% Jul, although annual deflation eased from -2.0% to -1.6% as expected
And at 1.30pm BST, we get the latest US housing starts data, showing the health of the American building sector.
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