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Sports Direct founder admits company has ‘outgrown him’

Sports Direct founder Mike Ashley has admitted the company may have outgrown him and agreed to an independent review of corporate governance, after he was faced with a series of allegations on how some workers are treated at the firm.

Mike Ashley

Mike Ashley

Mike Ashley faced MPs

Ashley appeared in front of MPs from the business, innovation and skills select committee today to answer questions on working practices at the firm.

He admitted that some workers had previously been paid less than minimum wage as a result of “bottlenecks” in security checks at the Shirebrook warehouse, which delayed staff on site after they had clocked off. He said the retailer was in talks with Revenue and Customs on back pay.

Ashley said he was “shocked” at stories that have emerged about the alleged treatment of staff. These include a report about a female worker who was offered a permanent contract if she went for dinner with a manager, and an employee who was called “selfish” because she wanted to leave on time.

Ashley admitted that his review of the working conditions, which he launched at the end of last year, had unearthed a few issues, some of which have already been addressed. 

“It is a work in progress and will never be complete. You guys will make a difference,” he told MPs. “You are pushing against an open door, not a closed door.

“Come and do an independent review, come annually for five years. I’m not afraid of it and there will be occasions where we deserve the cane. I’m telling you, you will find things wrong but all I want is fairness and balance.”

He said the firm has been a “victim of our own success” and blamed the unforeseen rise of ecommerce over the last 10 years for some of the issues arising at the warehouse.

“Ten years ago the web did not exist for Sports Direct, at least not in any significant way. The Shirebrook facility was built as a facility to supply stores not individual customers. We’ve had to go from picking one pair of socks to 36 with no automation, so I needed 10 times the amount of people than we previously did.”

The retailer has come under fire over its widespread use of agency workers at Shirebrook, where around 80% of staff are supplied by firms Transline and Best Connection Group.

“In the warehouse there is a culture of fear, with people who are scared because they are working under a system in which they know they could lose employment at any moment,” said Luke Primarolo, regional officer at Unite Union, at the hearing.

But Ashley argued that he could do more for workers than a union, and accused them of wanting to turn it into a “media circus”.

He admitted there is an imbalance between permanent workers and those on short-term or zero-hours contracts, but said “there is no way we could have physically grown the way we have and employed all the people ourselves”.

He said the responsibility for duty of care for workers will always stop at his door.

“I am the original founder, I am responsible for its biggest failures and successes – that’s why I will put myself forward and it may be that it has outgrown me.”

He added: “I can only do my best and my best might be good enough but that’s all you can have. I’m not going to do nothing when I’ve sat and heard stories like that.”

He also confirmed he did want to buy BHS to offer “that extreme value Sports Direct is known for”.

However, Ashley’s PR adviser, Keith Bishop, stopped him from answering when asked if he thought Arcadia boss Sir Philip Green had done anything wrong by selling BHS to Retail Acquisitions.

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