Shares in Sports Direct , Britain’s biggest sportswear retailer, fell by 10 percent on Tuesday after its founder said the company’s profits would fall this year.
Mike Ashley, who is deputy chairman of Sports Direct and holds 55 per cent of its equity, said: “We are in trouble, we are not trading very well. We can’t make the same profit we made last year.”
Sports Direct, which owns Heatons in Ireland, made core earnings of £383.2 million in the year to April 26, 2015.
Its latest forecast for the 2015-16 year was issued in January when it said it was no longer confident of meeting its core earnings target of £420 million pounds , guiding to a range of £380-420 million pounds.
“You might have expected an announcement this morning from Sports Direct revising down their profit guidance, but no such announcement has yet been forthcoming,” said independent retail analyst Nick Bubb
Shares in the firm have fallen more than 40 per cent over the last year and earlier this month lost their place in Britain’s FTSE 100 index of blue chip companies.
Sports Direct has been under fire from media, investors and politicians over its working practices.
On Monday, Ashley said he would refuse to face MPs in parliament to answer questions about the treatment of workers.
In his interview with the Times he said: “We are in trouble, we are not trading very well. We can’t make the same profit we made last year. We are supposed to be taking the profits up, they are not supposed to be coming down, and the more the media frenzy feeds on it, the more it affects us.” In January, nearly half a billion pounds was wiped from Sports Direct’s stock market value after the retailer shocked the City with a warning that annual profits could be £40 million lower than the £420 million then expected .
MPs have repeated their call to Mr Ashley to be questioned in Parliament about his firm’s treatment of workers. The founder of the sportswear company has refused to meet the Business Select Committee in London, offering instead to give MPs a tour of his head office in Shirebrook, Derbyshire. Committee chairman Iain Wright said : “We expect Mr Ashley to attend on 7 June and to take this opportunity to respond on public record to the serious concerns regarding the treatment of workers at Sports Direct.”
- Reuters
