Mike Ashley falls 11 places this year after Sports Direct was rocked by controversy over working conditions at its warehouse in Shirebrook, Derbyshire. MPs hauled Ashley into a parliamentary hearing over the summer and grilled him over the “appalling” conditions in Shirebrook. A subsequent scandal involving an apparent attempt to secretly film some of the MPs while on a visit to the warehouse added fuel to the flames.
Meanwhile, on a financial front, the Brexit vote and falling in the value of sterling has hit Sports Direct hard: it announced a 57% fall in underlying profits before tax after a “tough” six months. Group EBITDA also fell 33.5% year on year, to £145.3m, in the 26 weeks to 23 October 2016. This followed a profit warning for 2017 in October.
But all is not lost for Sports Direct. Ashley has set out plans to improve the firm’s working conditions and corporate governance. He also took on the role of chief executive when Dave Forsey left in September, so is now clearly accountable for the business. His swift acknowledgement of the problems and action to deal with them may limit the damage to his reputation long term.