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Long-term Ashley confounds the City

You have to wonder whether Mike Ashley's low profile thus far was not so much down to his brooding inwardness and publicity shyness, but the result of necessity. Perhaps the Sports Direct founder knew that if you wound him up sufficiently and put him in front of a camera, he was capable of antics that even the most hardened of City PRs couldn't patch up.

Last week, however, he could restrain himself no longer. On the back of a bashing from the City after its recent results, branded by one analyst as "much worse than our worst fears", he staged a press conference at which he claimed the City was full of "cry babies" and posed in pugnacious stance for the cameras. He went on to say that his stock was not for the "faint-hearted" and that he didn't want shareholders on the phone every five minutes demanding to know what was going on when the share price moved up or down.

Part of me takes his point and all of me finds this most amusing. But the thing with shareholders is this: they own your business and therefore have a right to know what you're doing with their money. That you're forced to account for every move is tedious but is, nonetheless, part and parcel of being the chief of a plc. I'm sure the nigh-on £1 billion that Ashley pocketed when he floated 43% of his company in March will go some way towards making his job seem somewhat less of a burden.

What's more, if your stock is trading at half the price it originally floated at less than six months ago, you've got to expect that even the most patient of backers might become twitchy. It's a wee bit much to accuse people of short-termism under those circumstances.

Such is the level of feeling against the firm that some are suggesting that Sports Direct should never have been floated and isn't "fit" to be a plc (or is it more of case of Ashley's face not fitting?). One industry commentator has suggested that the best possible outcome for the business would be to banish it to the corporate naughty step - that is, a spell in the hands of a private equity owner - until it presumably learns how to behave itself. And only then should it be allowed to come back and play with the gentlemen of the Square Mile.

It's quite a backlash, but one can't help wondering if what's really at the root of it is not the company's underperformance, nor Ashley's hammy defiance (though neither of those will help matters), but the fact that Ashley has made a lot of people in the City look stupid. If Sports Direct isn't fit to be a plc then why, pray tell, did its adviser Merrill Lynch go ahead with the float? If, as has also been suggested, the firm wasn't aware of all the listing requirements to get information to the market quickly, then again you have to question why Sports Direct wasn't fully prepared before it floated. And that's down to its advisers.

The answer, I suspect, is that Ashley is right. There are people in the City who are more interested in short-term wins than long-term prospects and every now and then that strategy will backfire. And with someone like Ashley rubbing their noses in it, no wonder they're crying.

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