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‘Diesel held us to ransom’ Sports Direct chairman tells MPs’ committee

Diesel “held USC to ransom” when it pulled out of the young fashion retailer and called in a £1.3m debt last year, Sports Direct chairman Keith Hellawell has said.

At a Scottish Affairs Committee hearing on March 25, Hellawell told MPs Diesel’s decision to pull out of USC from the autumn 15 could have had a “domino effect”, causing other suppliers to leave.

USC was making a loss of £20m when it went into administration in January and was bought by another of Sports Direct’s fascias, Republic.

Hellawell said: “Diesel said in the middle of last year they would stop supplying us in December. We pleaded with them to continue working with us; [we said] if they left things would have been even more difficult [at USC].They held us to ransom.”

He added: “Suppliers have power over retailers and it’s a constant battle to keep them on board. We would label a product USC, but they would reduce or take away the product because they wouldn’t give it to Sports Direct.”

But Diesel told Drapers it made “every effort” to end the relationship with USC amicably, by agreeing to honour all outstanding commitments and giving plenty of notice. It called in the debt after USC stopped payments for delivered stock.

Hellawell said the board was not made aware that Sports Direct’s chief executive David Forsey had met with administrators at Duff & Phelps two months before staff at USC’s Dundonald warehouse were given just 15 minutes of consultation ahead of losing their jobs.

He also said there was insuffient time for a consultation period for staff as the decision was made too close to the administration. “Whatever went on before, the board wasn’t aware,” Hellawell added.

The chairman also said Sports Direct founder Mike Ashley did not refuse to attend the hearing, but rather the board decided Hellawell was best placed to answer the committee’s questions.

Readers' comments (6)

  • Are Sports Direct really trying to blame Diesel for the mess they have created? and complete disregard for their employees and lack of basic humanity - trying to blame brands for the job losses! Next they'll be blaming brands for their need for zero hour contracts!

    This isn't a one off is it - Who are they going to blame for the Republic debacle.

    Ashley / Forsey - buy a mirror.

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  • darren hoggett

    Sports Direct are in complete denial. Trying to blame Diesel because they can't run a business properly is utterly ridiculous. I'm amazed Diesel supplied USC for as long as it did as it was the wrong environment for them.

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  • "Suppliers have power over retailers" Ha hah ha, very 1980's, hilarious.

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  • Let's see. USC don't pay their bills, don't pay their staff decent wages and clearly need a basic lesson in branded VM. Then they send a Chairman in front of a committee who says the board weren't aware of the goings on - why because Ashley, Forsey, Alexander and co made all the decisions in other meetings. No surprise he's sent to answer the questions and say he individually wasn't aware! Its so blatant its offensive that people don't recognise it and scandalous that they get away with it. Woe betide any supplier to SD Group and Diesel / others have to take some blame for supplying post Morrisson / Douglas USC

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  • Obvs that the Drapers comments section isn't read by the staff very frequently as that word should have been removed by now. Wonder how long it will stay in the post? .

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  • They still haven't read it...and now it's home time for Easter break.

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