Sports Direct

Sports Direct International plc
Public
Traded as LSE: SPD
Industry Retailing
Founded 1982 (1982)
Headquarters Shirebrook, England[1]
Key people
 Keith Hellawell (chairman)
Mike Ashley (Founder and Chief Executive)
Products Sporting goods
Revenue £2.832 billion (2015)[2]
£295.6 million (2015)[2]
Profit £241.4 million (2015)[2]
Number of employees
 17,207 (2015)[2]
Subsidiaries SportsDirect.com
Slazenger
Lillywhites
USC
Everlast
Dunlop
Lonsdale
Website www.sportsdirectplc.com

Sports Direct International plc is a British retailing group. Established in 1982 by Mike Ashley, the company is the United Kingdom's largest sports-goods retailer and operates roughly 670 stores worldwide.[3] The company owns a large number of sporting brands and trades predominantly under the SportsDirect.com brand. Other retailers owned by the company include USC and Lillywhites. The company operates under low margins.[4]

Sporting and fashion brands owned include Donnay, Slazenger, Firetrap, Dunlop (in most markets), Everlast, Kangol, Karrimor and Lonsdale.

Mike Ashley has continued to hold a majority stake in the business, and his holding has been 61.7 percent since October 2013.[5] It is listed on the London Stock Exchange and it is a constituent of the FTSE 250 Index.

History

Early history

Sports Direct in the former Lillywhite's shop on the Headrow in Leeds

The company was founded by Mike Ashley in 1982 as a single store in Maidenhead trading under the name of Mike Ashley Sports.[6] In 1984, Preston Sports shop was opened in London and by 1992 the Company had 12 stores.[6] 1995/96 saw the stores change to Sports Soccer along with the re-location of head office and warehouse to a 100,000 sq. foot unit in Dunstable.[6] The number of retail stores had now increased to 50, along with the acquisition of the Donnay tennis and golf brand.[6] Ashley incorporated the business in 1999.[7]

By 2000, the business had 80 stores, and had formed a joint venture in Belgium, with 22 stores trading as Disport.[6] The Lillywhites chain of 10 stores and the Lonsdale brand were acquired in 2002 and by 2003, the number of retail stores had increased to 150.[6][7] In 2005 the company began a major rebrand of the stores, changing the fascias to Sports World.[6]

Dunlop acquisition

In February 2004, the company acquired Dunlop Slazenger for around £40M, which included the Dunlop, Slazenger and Carlton brands.[8] This was followed by the acquisitions of outdoor gear manufacturer Karrimor in March for a reported £5 million.[9] In 2006 he acquired Kangol for an estimated £12 million.[10] Most of these brands were bought from distressed sellers. After looking at a takeover,[11] Sports Direct took a £9 million stake and signed a lucrative long-term deal in August 2005 with troubled brand Umbro,[12] which was subsequently sold to Nike.[13]

The brands themselves are an increasingly important part of the business, and Sports Direct made £10M, from selling the intellectual-property rights to the Slazenger Golf brand to arch-rival JJB in 2005.[7]

Going public

In late November 2006, a number of business newspapers reported that Ashley was looking at an IPO of Sports World International. He hired Merrill Lynch, who valued the group at up to £2.5bn ahead of a possible flotation on the London Stock Exchange.[14] The group debuted on the exchange on 27 February 2007.[15]

Corporate finance and mergers

In December 2006, it was revealed that Sports Direct had built up a 29.4% stake in Blacks Leisure Group, the owner of Millets.[16]

In May 2007, it was also revealed that Ashley had held talks with John Hargreaves, founder of Matalan on both taking a 25% stake in the troubled retail business and installing mezzanine floors in larger Matalan stores, on which SportsDirect.com outlets could be operated.[17]

In June 2007, the company acquired Everlast for £84 million.[18]

In July 2008, it was disclosed that Sports Direct also held a 12.3% holding in the John David Group, parent of JD Sports.[19] The stake is currently 11.9% of JD Sports as of November 2013. Sports Direct formerly held 5% of Amer Sports.[20] "[Ashley] likes to park his tanks on peoples' lawns," said a banker.[14]

It was announced on 1 October 2012, that Sports Direct had purchased rival retailer JJB's brand name, website, 20 stores and all of their stock in a deal for approximately £24m. The deal saved around 550 jobs.[21][22][23][24]

In February 2013, after fashion retailer Republic went into administration, Sports Direct bought 116 Republic stores, the brand name and the company's head office from the administrator for an undisclosed sum.[25]

In July 2013, more than 2,000 full-time staff were awarded around £70,000 each under the company's bonus share scheme.[26]

On 13 January 2014, Sports Direct bought 4.6% of Debenhams shares. The stock market purchase of 56.8 million shares (worth around £46m) was made without the prior knowledge of the Debenhams board. Sports Direct stated at the time it intends to be a supportive share holder. The Debenhams board responded by stating they are open-minded with regard to exploring operational opportunities to improve its performance.[27][28] Sports Direct sold its shares on 16 January 2014, although they took out an option to buy further shares up to a total of 6.6%.[29]

In July 2013, it was revealed that around 90% of the company's employees are employed on zero-hours contracts, an issue that some of their current and former employees have taken the company to court over.[30]

From January 2013 to December 2014, 76 ambulances or paramedic cars were sent to the postcode for Sports Direct's distribution centre, according to a Freedom of Information request by the BBC.The ambulance service received three calls about women experiencing pregnancy difficulties, including one who gave birth in the site's toilets.[31] A Channel 4 Dispatches documentary branded Sports Direct a 'sweatshop' with working conditions compared to the Victorian era and bosses were accused of punishing employees if they talk.[32] Labour MP John Mann claimed English speakers were snubbed for positions with the chain despite 3,000 people working there. He said, 'British workers living in his constituency near Sports Direct's 800,000 square foot Shirebrook warehouse were snubbed for jobs at the Derbyshire site'. The warehouse is called the 'gulag' among local residents.[33]

In October 2015, the chief executive of Sports Direct, David Forsey, was charged with a criminal offence for consultation failures over USC staff who only had 15 minutes notice of redundancy.[34][35]

In December 2015, an investigation by The Guardian found that the company fines staff for late clocking on, does not award overtime for late clocking off, relies on zero hour contracts, and regularly makes staff wait unpaid for a security check at the end of shifts. A union official suggested that these practices were illegal as they brought workers' earnings below the minimum wage. The company responded by saying there were unspecified inaccuracies in the reports.[36] A representative from the charity ShareAction claimed that workers are "jeopardising their health" for fear of being dismissed while another shareholder said the company's reputation as an employer was "atrocious".[37]

Late in December 2015 Sports Direct announced a 15 pence per hour increase for staff currently receiving less than minimum wage, taking them above minimum wage,[38] the annual cost of this was said in the announcement to be ~£10 Million (GBP); however it was immediately noted that £0.15p * 37.5 hours * 19,000 staff * 52 weeks = 5,557,500 (~£5.5 million), this and other factors resulted in many (including Unite) calling it a "PR Stunt".[39] Workers on zero-hours contracts are not included in the rise and neither are those already paid more than minimum wage (management/supervisors etc.) therefore the 19,000 staff above is actually substantially fewer.[40]

In August 2016, Sports Direct admitted breaking the law and will disburse unlawfully withheld wages totalling about £1m to the affected workers.[41][42]

In November 2016, six MPs from the Business and Skills Committee visited Sports Direct, and reported that while there, Sports Direct attempted to place them under surveillance.[43]

Operations

A branch of Sports Direct in Bradford

The group has over 470 UK stores including the chains SportsDirect.com (Sports World prior to 2008), Lillywhites, Field & Trek and USC. The group employs around 11,000 people in the UK and at stores in Ireland, France, the Netherlands, Belgium, Estonia, Latvia, Luxembourg, Hungary, Slovenia, Slovakia, the Czech Republic, Austria, Germany, Spain, Poland, Cyprus, Portugal and Iceland.

Sports Direct-branded stores exist under a franchising agreement in South Africa and the Middle East. In 2006 it overtook JJB Sports as the UK's largest sportswear retailer.[44]

A Sports World store in North Lincolnshire
A Sports Direct store in Bradford

Brands

Retail outlet brands

Current

  • CyclesDirect.com
  • EAG. Austrian sports chain in which Sports Direct acquired a 51% stake for €40.5m (£34.6m) in May 2013.[45]
  • Field & Trek
  • Firetrap
  • Gelert
  • Heatons
  • Lillywhites
  • MegaValue.com[46]
  • SheRunsHeRuns
  • SportsDirect.com. High street and internet retailer created from the merger of Sports Soccer and Sports World, and progressively rebranded as SportsDirect.com since 2007 after the company's domain name.[47] Sponsor of St James' Park, home of Championship soccer team Newcastle United, since 2009.[48]
  • Sportland International Group. Major Baltic sports retailer in which Sports Direct acquired a 60% stake in May 2013.[45]
  • Sweatshop
  • USC
  • European Golf

Defunct/inactive

  • Gilesports – merged into SportsDirect.com
  • Hargreaves Sports – merged into SportsDirect.com
  • JJB Sports
  • Republic – merged into USC
  • Sports Soccer – merged into SportsDirect.com
  • Sports World – merged into SportsDirect.com
  • Streetwise Sports – merged into SportsDirect.com

Clothing and equipment brands

Previously owned brands

  • Bike Clearance
  • Original Shoe Company – sold to JJB Sports in December 2007.[49]
  • Umbro – sold to Nike in 2007

See also

References

  1. ↑ "SPORTS DIRECT INTERNATIONAL PLC - Overview (free company information from Companies House)". Companies House. Retrieved 2016-11-10.
  2. 1 2 3 4 "Annual Report 2015" (PDF). Sports Direct. Retrieved 15 April 2016.
  3. ↑ Finch, Julia (28 February 2007). "Flotation makes Sports Direct founder a billionaire". The Guardian. London. Retrieved 7 November 2007.
  4. ↑ Millar, Michael (12 September 2013). "How Sports Direct beat the opposition". BBC News. Retrieved 10 February 2014.
  5. ↑ Titcomb, James (24 October 2013). "Ashley sells £106m in Sports Direct shares". The Daily Telegraph. London. Retrieved 10 February 2014.
  6. 1 2 3 4 5 6 7 "History". Sports Direct. 2012. Archived from the original on 5 February 2012. Retrieved 1 October 2016 – via Wayback Machine.
  7. 1 2 3 "Revealed UK's first sports kit billionaire". The Times. 9 April 2006. Retrieved 23 May 2010.
  8. ↑ Osborne, Alistair (5 February 2004). "Game, set and match for Dunlop Slazenger". The Daily Telegraph. London. Retrieved 23 September 2008.
  9. ↑ Osborne, Alistair (3 March 2004). "Ashley slips Karrimor brand in his rucksack". The Daily Telegraph. London.
  10. ↑ Butler, Sarah (5 December 2006). "Sports World owner sees right fit for Kangol hats". The Times. Retrieved 29 October 2015.
  11. ↑ Kollewe, Julia (8 August 2005). "Sports World tycoon mulls bid for Umbro". The Independent. London. Retrieved 23 May 2010.
  12. ↑ "Sports World tycoon mulls bid for Umbro". The Times. 17 July 2005. Retrieved 7 November 2007. (subscription required (help)).
  13. ↑ "US giant Nike buys the Umbro diamonds". The Scotsman. 24 October 2007. Retrieved 20 November 2016.
  14. 1 2 "Personal finance – How to grow your wealth and spend less money". The Daily Telegraph. Retrieved 21 March 2015.
  15. ↑ "Sports Direct: timeline". The Guardian. London. 24 July 2007. Retrieved 7 November 2007.
  16. ↑ Davey, Jenny (10 December 2006). "Ashley empire may be worth 25bn". The Times. Retrieved 23 May 2010.
  17. ↑ Fletcher, Richard (21 May 2006). "Billionaire sports tycoon plots move into Matalan". The Times. Retrieved 23 May 2010.
  18. ↑ "Mike Ashley agrees to buy Everlast". The Telegraph. 29 June 2007. Retrieved 20 November 2016.
  19. ↑ Annual Report 2008 Archived 15 September 2008 at the Wayback Machine.
  20. ↑ Robinson, Gwen (24 January 2008). "Sports Direct's Ashley rebuilds Amer stake". Financial Times. Retrieved 27 August 2008.
  21. ↑ "The JJB stores Sports Direct has bought". Daily Telegraph UK. London. 1 October 2012. Retrieved 19 December 2012.
  22. ↑ Wood, Zoe (1 October 2012). "Sports Direct thrashes out deal to buy 60 JJB Sports stores". Guardian UK. London. Retrieved 19 December 2012.
  23. ↑ "Sold JJB Sports stores inundated with shoppers". BBC News. 1 October 2012. Retrieved 19 December 2012.
  24. ↑ Grierson, Jamie; Williams, Holly (1 October 2012). "2,200 jobs go in JJB Sports deal". The Independent. London. Retrieved 19 December 2012.
  25. ↑ "Republic fashion chain bought by Sports Direct". BBC News. 28 February 2013. Retrieved 28 February 2013.
  26. ↑ Neville, Simon (18 July 2013). "2,000 Sports Direct staff to receive £100,000 bonus after record profits". The Guardian. London.
  27. ↑ "Sports Direct buys 4.6% Debenhams stake". BBC. 13 January 2014. Retrieved 13 January 2014.
  28. ↑ "Sports Direct nets 5% stake in Debenhams". Sky News. 13 January 2014. Retrieved 13 January 2014.
  29. ↑ "Sports Direct takes option on Debenhams stake". BBC News. 16 January 2014. Retrieved 16 January 2014.
  30. ↑ "Sports Direct 'faces 20,000 legal challenges'". This is Money. Retrieved 21 March 2015.
  31. ↑ Farrell, Sean. "Ambulances called to Sports Direct HQ more than 80 times in two years". The Guardian. Retrieved 9 May 2016.
  32. ↑ "Sports Direct branded a 'sweatshop' after Channel 4's Dispatches". Daily Mail. 29 April 2015. Retrieved 9 May 2016.
  33. ↑ "Sports Direct warehouse 'won't give Britons jobs' claims Labour MP". Daily Mail. 15 December 2015. Retrieved 9 May 2016.
  34. ↑ Goodley, Simon; Butler, Sarah (9 October 2015). "Sports Direct chief executive charged over USC administration". The Guardian. Retrieved 11 December 2015.
  35. ↑ O'Reilly, Noel (21 October 2015). "Company directors face criminal charges over redundancies". Personnel Today. Retrieved 11 December 2015.
  36. ↑ "Revealed: how Sports Direct effectively pays below minimum wage". The Guardian. 9 December 2015. Retrieved 9 December 2015.
  37. ↑ Ruddick, Graham. "Sports Direct denies 'Dickensian practices' in face of investor revolt". The Guardian. Retrieved 9 May 2016.
  38. ↑ Graham Ruddick. "Sports Direct's Mike Ashley promises £10m to pay staff above minimum wage". The Guardian.
  39. ↑ "Sports Direct accused of yet another 'PR stunt' to distract from 'Victorian' work practices". Unite.
  40. ↑ "Sports Direct's Mike Ashley agrees to pay staff national minimum wage from 2016". MSN. Retrieved 18 March 2016.
  41. ↑ Goodley, Simon (15 August 2016). "Sports Direct warehouse workers to receive back pay". The Guardian. Retrieved 15 August 2016.
  42. ↑ "Sports Direct 'to back-pay Derbyshire workers £1m'". BBC News. Retrieved 15 August 2016.
  43. ↑ "Sports Direct 'bugged' our visit to Shirebrook warehouse, say MPs". British Broadcasting Corporation. Retrieved 7 November 2016.
  44. ↑ Seawright, Stephen (6 April 2006). "Sports World International sales climb 45pc and knock JJB off top spot". The Daily Telegraph. London. Retrieved 23 September 2008.
  45. 1 2 "Major European expansion for Sports Direct". Insider Media. 29 May 2013. Retrieved 29 May 2013.
  46. ↑ Ravender Sembhy. "Mike Ashley: From Sports Direct to Mega Value, the controversial career of the Newcastle chairman". International Business Times UK. Retrieved 2 May 2016.
  47. ↑ "Annual Report 2007" (PDF). Sports Direct International. Retrieved 7 November 2007.
  48. ↑ "Newcastle reveal new stadium name". BBC News. 4 November 2009. Retrieved 23 May 2010.
  49. ↑ Hall, James; Fletcher, Richard (19 December 2007). "Ashley sells Original Shoe Company to JJB". The Telegraph. London. Retrieved 10 February 2014.
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