Mike Ashley Select Committee Appearance

7th Jun '16 by TraderTim

6 comments 5681 reads

As many will know, Mike Ashley is appearing in front of MPs on the Business, Innovation and Skills Committee are looking into the working practices at Sports Direct. I am currently watching it and finding it interesting. Mike Ashley speaking very candidly about the business and its current problems even musing that maybe Sports Direct International had outgrown him. Anyway, it's certainly very different to many other CEO performances I have seen in my time.

With the company hovering around 52-week lows, I wanted to see what people thoughts were on outlook of Sports Direct of the back of this.

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TraderTim

Premium Member

6 comments

Francis Dwan

7th Jun '16

Up 5.4% today, people seem to like it!

gus 1065

8th Jun '16

I suspect the reaction is a relief rally on the basis that he only shot himself in the one foot (admitting he SD wasn't paying the minimum wage taking into account delays for staff searches) rather than blowing off both legs and an arm as Mr A is sometimes prone to do when he gets wound up! Interested to see what happens today as the overnight media coverage wasn't too favourable.

grumpy5

8th Jun '16

The MPs gave him a free kick at goal when they asked him if the business had got to big (for his management style). His overall tone, that he could not be expected to know about all the negatives across his business, is pure hokum. Retailer companies founded by a strong entrepreneur tend to carry the culture of their founder with them. I worked for one such company where the culture had endured for more than a century, and can think of several other UK retailers where the founding culture endures (eg John Lewis, French Connection).

I find it difficult not to conclude that all the aspects of SD that irritate MPs (and the broader public) can be attributed to Ashley's style.

TraderTim

8th Jun '16

This true - it went well for him by all accounts.

Nevertheless, part of me thinks he will always be the pantomime villain.

TraderTim

8th Jun '16

I think the company is a bit of a sticky spot to be honest. I think it is unlikely to make the re-structuring changes alluded too yesterday, which I think will invite further problems, claims and scrutiny. The structural problems which I think are wholly or partly in place to maintain and squeeze as much profit out of a low-margin business model. Correcting these issues to extent Unions, MPs and employees want are going to come at a cost and this will hit the bottom line of the company.

Tough times ahead in my opinion.

WarrantStar

8th Jun '16

I think his idea is to sell stuff at the lowest possible cost. He probably is great entrepreneur. But he is not a great business man. With the impact of the living wage his margins are going to suffer. I have no confidence in him because he has more or less admitted that he doesn't know how to run the business! No idea from him on how to install the required quality of senior managers to keep a business of this size on an even keel.

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Mike Ashley Select Committee Appearance

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TraderTim

6 comments

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