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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
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Relations between Sports Direct and the unions have long been fraught.
But Janet Williamson, chair of the Trade Union Share Owners, suggests that the new independent review is a good opportunity for a fresh start.
“This is good news for Sports Direct workers, especially young workers who make up a large part of their staff but too often get a poor deal at work.
“The board should now consult both shareholders and trade unions in finalising the plans for the independent review. Trade unions representing workers at Sports Direct stand ready to work with the company to ensure a successful future that is fair for its staff.”
Unions will presumably be pushing Ashley to offer permanent contracts to the 4,000-ish agency workers, who are employed at Shirebrook on effectively zero hours contracts.
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We don’t often find the City singing from the same hymn sheet as Britain’s unions. But the two sides are united today.We don’t often find the City singing from the same hymn sheet as Britain’s unions. But the two sides are united today.
After putting pressure on Ashley for months, investors are generally welcoming the decision to hold a properly independent review of Sports Direct’s operations.After putting pressure on Ashley for months, investors are generally welcoming the decision to hold a properly independent review of Sports Direct’s operations.
Paul Lee, head of corporate governance at Aberdeen Asset Management, called it a “good start”:Paul Lee, head of corporate governance at Aberdeen Asset Management, called it a “good start”:
The fact that the review will now be undertaken by an independent party provides comfort and I am sure all shareholders will welcome the opportunity to offer constructive thoughts on the remit of the review.The fact that the review will now be undertaken by an independent party provides comfort and I am sure all shareholders will welcome the opportunity to offer constructive thoughts on the remit of the review.
There is much more work to be done but hopefully today is the first step on the long journey to rebuild investor trust and to rectify the problems at SportsDirect. All shareholders want a well governed, sustainable business.”There is much more work to be done but hopefully today is the first step on the long journey to rebuild investor trust and to rectify the problems at SportsDirect. All shareholders want a well governed, sustainable business.”
Andy Griffiths, executive director of the Investor Forum, is also pleased:Andy Griffiths, executive director of the Investor Forum, is also pleased:
Our Members believe this is an opportunity to bring about meaningful and lasting change, and are committed to working constructively with the Board and the independent reviewer to ensure it can be a turning point in rebuilding trust.”Our Members believe this is an opportunity to bring about meaningful and lasting change, and are committed to working constructively with the Board and the independent reviewer to ensure it can be a turning point in rebuilding trust.”
Relations between Mike Ashley and the City hit a nadir this month when investors voted against chairman Keith Hellawell’s reappointment.Relations between Mike Ashley and the City hit a nadir this month when investors voted against chairman Keith Hellawell’s reappointment.
They are also unhappy that Mike Ashley’s brother has a deal to deliver Sports Direct products abroad.They are also unhappy that Mike Ashley’s brother has a deal to deliver Sports Direct products abroad.
Eyebrows have also been raised over the appointment of Michael Murray, boyfriend of Ashley’s elder daughter Anna, as a property consultant.Eyebrows have also been raised over the appointment of Michael Murray, boyfriend of Ashley’s elder daughter Anna, as a property consultant.
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The Unite union reckon Mike Ashley has now “grasped” the need to tackle the employment problems at Sports Direct.The Unite union reckon Mike Ashley has now “grasped” the need to tackle the employment problems at Sports Direct.
They are also pushing the government to outlaw zero-hours contracts (reminder: Ashley is offering permanent contracts to all workers at his retail shops, but not to agency staff at the retailer’s Derbyshire warehouse).They are also pushing the government to outlaw zero-hours contracts (reminder: Ashley is offering permanent contracts to all workers at his retail shops, but not to agency staff at the retailer’s Derbyshire warehouse).
Unite assistant general secretary Steve Turner says:Unite assistant general secretary Steve Turner says:
“Increasingly businesses are recognising that they have no place in the modern workplace and are bad for workers, bad for business and bad for the economy. The government should now show leadership and follow the lead of government’s like New Zealand and ban zero-hours contracts.”“Increasingly businesses are recognising that they have no place in the modern workplace and are bad for workers, bad for business and bad for the economy. The government should now show leadership and follow the lead of government’s like New Zealand and ban zero-hours contracts.”
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Jon Tricket, Labour’s shadow business secretary, has criticised Mike Ashley for dragging his feet over allowing an independent review of Sports Direct.Jon Tricket, Labour’s shadow business secretary, has criticised Mike Ashley for dragging his feet over allowing an independent review of Sports Direct.
He says:He says:
“News that Sports Direct is finally responding to its shareholder wishes and agreeing to an independent review of its working practices and corporate governance is a step in the right direction towards ridding the company of its exploitative practices once and for all.“News that Sports Direct is finally responding to its shareholder wishes and agreeing to an independent review of its working practices and corporate governance is a step in the right direction towards ridding the company of its exploitative practices once and for all.
“Apparent resistance by Mr Ashley has made this process harder than it needed to be. Labour are looking at ways to improve corporate governance to avoid such scandals in the future, and to ensure that the highest standards apply in British industry.”“Apparent resistance by Mr Ashley has made this process harder than it needed to be. Labour are looking at ways to improve corporate governance to avoid such scandals in the future, and to ensure that the highest standards apply in British industry.”
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The Press Association has a good write-up of Mike Ashley’s TV performance, by Aine Fox.The Press Association has a good write-up of Mike Ashley’s TV performance, by Aine Fox.
‘PR NIGHTMARE’ MIKE ASHLEY DEFENDS FLYING TO WORK BY HELICOPTER‘PR NIGHTMARE’ MIKE ASHLEY DEFENDS FLYING TO WORK BY HELICOPTER
Sports Direct boss Mike Ashley said he is being “real” when he chooses to travel by helicopter, and disclosed that a cleaning lady at the company was paid an £80,000 bonus.Sports Direct boss Mike Ashley said he is being “real” when he chooses to travel by helicopter, and disclosed that a cleaning lady at the company was paid an £80,000 bonus.
Speaking after the firm announced it would have an independent review of its working practices and corporate governance, he reiterated his apology for things that had gone wrong but insisted there have also been positives at the retailer.Speaking after the firm announced it would have an independent review of its working practices and corporate governance, he reiterated his apology for things that had gone wrong but insisted there have also been positives at the retailer.
He defended his expensive method of travel, and said the government is responsible for workers being paid the minimum wage, not him.He defended his expensive method of travel, and said the government is responsible for workers being paid the minimum wage, not him.
He told BBC Breakfast:He told BBC Breakfast:
“I do fly to work by helicopter, it’s a reality. So when people say, ‘Oh be real’, that’s how I travel.”“I do fly to work by helicopter, it’s a reality. So when people say, ‘Oh be real’, that’s how I travel.”
He added:He added:
“People will say, ‘How can you have a plane when your workers are on minimum wage?’“People will say, ‘How can you have a plane when your workers are on minimum wage?’
“I said, ‘But I don’t set the minimum wage.’ If the minimum wage would be the living wage, then the government who set the rules should set it at the living wage. That’s as I look at it.”“I said, ‘But I don’t set the minimum wage.’ If the minimum wage would be the living wage, then the government who set the rules should set it at the living wage. That’s as I look at it.”
Mr Ashley put the poor practices discovered at the business down to a “rotten apple in the barrel” and said there are a lot of good things about the firm.Mr Ashley put the poor practices discovered at the business down to a “rotten apple in the barrel” and said there are a lot of good things about the firm.
He said:He said:
“I can tell you in the last five years Sports Direct will have paid out over 200 million in bonuses. So I can tell you the cleaning lady got an £80,000 bonus on top of her normal pay. Nobody in the UK has done that.“I can tell you in the last five years Sports Direct will have paid out over 200 million in bonuses. So I can tell you the cleaning lady got an £80,000 bonus on top of her normal pay. Nobody in the UK has done that.
“What we’ve got to do is focus on getting the bits we’ve got wrong, to the extreme highs of the bits we’ve got right.“What we’ve got to do is focus on getting the bits we’ve got wrong, to the extreme highs of the bits we’ve got right.
“And paying out that kind of money doesn’t mean you’re allowed to get these bits wrong, where clearly I’ve taken my eye off the ball.“And paying out that kind of money doesn’t mean you’re allowed to get these bits wrong, where 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.”“I’ve said sorry, I’ve said I’m going to fix it, and I will.”
Describing himself as a bit of a “PR nightmare”, he referred to the moment he joked that he had been to the casino after he pulled a wad of cash from his pocket when he was showing investors and journalists around the Shirebrook warehouse earlier this month.Describing himself as a bit of a “PR nightmare”, he referred to the moment he joked that he had been to the casino after he pulled a wad of cash from his pocket when he was showing investors and journalists around the Shirebrook warehouse earlier this month.
He said:He said:
“The one thing people didn’t say to me was, ‘Mike, have you checked how much money you’ve got in your pocket?’ And of course nobody thought to ask me whether or not I had genuinely been to the casino a few days earlier.”“The one thing people didn’t say to me was, ‘Mike, have you checked how much money you’ve got in your pocket?’ And of course nobody thought to ask me whether or not I had genuinely been to the casino a few days earlier.”
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Joey Barton, the oft-banned footballer, has given us an insight into Ashley’s treatment of his workers (and that helicopter).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: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.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.”“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.”
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Green party: government must reopen employment reviewGreen party: government must reopen employment review
The Green party hopes Sports Direct’s U-turn signals a fundamental shift towards workers’ rights.The Green party hopes Sports Direct’s U-turn signals a fundamental shift towards workers’ rights.
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.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, the co-leader:Here’s Jonathan Bartley, the co-leader:
“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.“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 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.”“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. 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.”“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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