Retail tycoon faces critics

Ashley admits Sports Direct failings and quits Rangers role

Mike Ashley at BIS hearingMike Ashley, the retailer and football club owner, admitted to MPs that working practices at Sports Direct’s giant warehouse had fallen below what is acceptable.

The firm has been accused of creating a “culture of fear”, with a tough disciplinary system, the use of controversial zero-hours contracts and time-consuming security searches.

Mr Ashley, addressing the Business, Innovation and Skills committee in the Commons, confirmed that the firm’s workers had been paid below the national minimum wage.

Mr Ashley, who is a minority shareholder in Rangers and owner of Newcastle United, agreed to be questioned after months of refusing to comply with a parliamentary summons. He said he wanted to defend the company’s “good name”.

The billionaire founder of the leisurewear chain told MPs how he was “unpleasantly surprised to learn how staff have suffered” at the Shirebrook warehouse.

He confirmed that the tax office was investigating the firm over the minimum wage issue but he seemed to wrongfoot MPs when he said the company may have become too big for him to manage.

In a letter headed “nothing to hide”, sent to committee chairman Iain Wright ahead of the meeting, Mr Ashley confirmed how he had changed his mind about attending the hearing. He said: “I am mindful of your statement to the press on Friday in which you question whether or not Sports Direct has anything to hide.

“I can assure you that nothing is further from the truth. I believe my repeated invitations for you to attend Shirebrook are a clear demonstration that in fact we have nothing to hide. I was merely seeking to avoid an unnecessary media circus.

“However, after much reflection over the last 48 hours, I have concluded that a lengthy legal battle would be of no benefit to either of us. It would also no doubt lead to further unwarranted accusations that I am being secretive, whereas in fact I have been open and honest at every stage of this process.

“I have therefore reconsidered my position and I am writing to confirm that I will now be attending parliament on Tuesday in order to defend the good name of Sports Direct on behalf of all of the great people who work here.”

  • Separately it emerged that Mr Ashley has stepped down from the board of Rangers Retail.

His move will reduce his influence over the merchandising arm of the Ibrox club and is the latest twist in a bitter dispute with the board.

Mr Ashley, who is the majority owner of Sports Direct, and the firm’s chief executive, David Forsey, are believed to have tendered their resignations on Friday.

The long-running feud surrounds the terms of the deal with Sports Direct which means only 4p from every pound spent in the Ibrox store is retained by the club.

Cameron Olsen is now the only Sports Direct representative on the Rangers Retail board, acting as company secretary alongside club chairman Dave King and director Paul Murray.

The club has already lodged a seven-year notice period required to cancel all contractual ties with Sports Direct but the arrangement is also heading for the courts.

> As I See It: Terry Murden on why Britain’s retail bosses deserve a grilling

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