Shareholder frustration at Sports Direct could topple chairman at AGM
PUBLISHED: 08:42 06 September 2017 | UPDATED: 08:42 06 September 2017
As mounting shareholder frustration at Sports Direct looks set to topple its chairman, owner Mike Ashley maintains confidence in his ambition to make the firm the “Selfridges of sport”.
In a trading update ahead of its AGM the chain said the outlook “remains optimistic”, with the performance of its “new generation flagship stores” exceeding expectations and earnings growth expected to be 5-15% ahead of last year.
Mr Ashley said: “We remain fully focused on our strategic goal of moving our core business towards the ‘Selfridges’ of sport in order to further strengthen our proposition and drive long-term profitability.”
His comments come as pressure mounts on chairman Keith Hellawell, with a number of investors in the retailer publicly voicing their opposition to his re-election ahead of a crunch vote at today’s (Wednesday’s) annual general meeting.
The former West Yorkshire Police chief constable and government drugs tsar has presided over a long list of scandals and controversies at the chain, and has pledged to step down if he does not receive the support of a majority of independent shareholders.
In January Mr Hellawell saw 54% of independent shareholders vote against his reappointment and was only saved by Mr Ashley, who owns 55% of the company and whose backing meant he was re-elected with a total of 80.92% of votes cast.
Hermes Investment Management, Royal London Asset Management and Standard Life Aberdeen are among the investors to say they intend to vote against the chairman’s re-election.
The firm suffered another blow ahead of its AGM after being accused of reneging on a promise to offer guaranteed hours to staff on zero hour contracts.
The Unite union claims the troubled retailer has been looking to take on casual staff on zero hour contracts, despite vowing to stop the practice during last year’s AGM.
Sports Direct said it would offer guaranteed hours to all staff following a review by its law firm RPC, which it launched in response to claims that “Victorian” style working conditions were rife throughout the firm.