Credit: Johnvedwards/Wikipedia

How Mike Ashley's reputation went south

The Sports Direct founder has been struggling with his public image for years. But does he care?

by Adam Gale
Last Updated: 07 Jun 2016

‘Easily Britain’s answer to Howard Hughes.’ That’s how MT veteran and the compiler of the Rich List and Britain’s Top 100 Entrepreneurs Philip Beresford described Mike Ashley. The billionaire founder and majority shareholder of Sports Direct is as famous for his secrecy as for his undoubted business acumen.

Yet despite his reclusive tendencies (or perhaps because of them – everyone loves a mystery), Ashley has courted controversy on numerous occasions over the years. Here’s MT’s run down of his reputational journey so far.

1964-1999: Mysterious but unblemished

As a schoolboy in Burnham, Ashley was known for two things: squash (he was a keen player and later a county coach) and ambition. ‘I remember him talking to his friends about his Saturday job in a sportswear shop, and talking about how one day he would own the shop,’ his former teacher Margaret Fleet told the Guardian in 2006. ‘It doesn’t surprise me that he has gone on to be successful.’

After leaving school at 16 to start trading on the high street, he founded his own store Sport and Ski in Maidenhead a few years later, in the early 80s. For the next 17 or 18 years he grew his chain, by then called Sports Soccer, to over a hundred stores without debt or equity finance.  As a sole trader until 1999, he was able to avoid media attention almost entirely – and thus remained uncontroversial.

2000-3: Model citizen?

That changed in 2000, when Ashley walked into the Office of Fair Trading (OFT) to turn whistleblower on football shirt price fixing, giving formal evidence the following year. The sporting goods market was crowded back then, with JJB, JD and Allsports all major players. ‘There’s a club in the north, son, and you’re not part of it,’ JJB’s Dave Whelan once reportedly told him. Though JJB and Allsports accused Ashley of giving unreliable evidence to damage his competitors, the OFT upheld his character.

2007: City spat

By 2007, Ashley’s business had grown substantially, in large measure by acquisitions. Renamed Sports World, it bought the likes of Dunlop, Slazenger and Lonsdale, dramatically discounting once prestigious brands to get punters through the door, where they were bamboozled with higher margin own brand products. That year, it listed on the stock market as Sports Direct, with Ashley’s long time lieutenant Dave Forsey as CEO (Ashley himself became ‘executive deputy chairman’, a role he still holds).   

Though it made millions in its IPO, Sports Direct didn’t do so well in trading that year, losing around two thirds of its value in nine months. Investors wanted answers, but Ashley remained tight lipped as ever.

Eventually though, the pressure to speak became too much. ‘I’ve got balls of steel. Some investors have been great and have been very supportive. But some of these City people act like a bunch of cry babies,’ he told the Telegraph, while posing as a boxer, the reason for his publicity shyness becoming painfully apparent. ‘Sports Direct should come with a government health warning - this stock is not for the faint-hearted.’ For some reason, the City cry babies weren’t reassured...

2007: Newcastle United's maverick owner 

Ashley’s habit of making odd purchases can be traced back to his surprise entrance into the world of football, the same year as Sports Direct’s IPO. The details of his troubled relationship with Newcastle fans aren’t for these pages, but suffice it to say they haven’t been bosom buddies. Nine years later, though, he’s still the owner, telling the Mirror that while he regretted the purchase, he’s not going anywhere. ‘They’ve got me, and I’ve got them. That is the way it is.’

2008: An unusual shopping habit

Not all of Ashley’s purchases are so esoteric, but they usually get heads turning. In 2008, it was revealed Sports Direct had acquired a 12% stake in the parent company of rival JD Sports and a 5% stake in another rival, JJB. This later rose to over 20%, which led the OFT to announce it would investigate the arrangement. Sports Direct sold the JJB stake the following year, but still holds a share in JD.

2014-5: The battle for Rangers

Undeterred by his woes at Newcastle, Ashley bought a 9% stake in troubled Rangers FC in 2014, while also entering into a joint venture over lucrative merchandising rights. So began a long and intricate Game of Thrones-style battle for the club’s board. For a while, Ashley - also the club’s most important creditor during this period - appeared to have triumphed, inserting his ‘associates’ into the directors’ chairs. But apparently such measures as taking the club’s car park and stadium naming rights as security for the loan didn’t ingratiate him to the population of Glasgow (or Gordon Ramsay of all people), which eventually forced a retreat.

2015: The battle of the bonus

While all this was going on, Ashley was in a fight on the home front, with Sports Direct’s other shareholders. The company founder wanted them to approve a £180m bonus scheme, despite concerns that he could personally receive a huge share of the sum. After several attempts, Ashley succeeded in convincing them, only to renounce any personal share of the bonus weeks after being awarded it. Mike the magnanimous? 

2015: USC’s ‘rescue’

As if Ashley didn’t have enough to worry about last year, one of his businesses was in a spot of bother. Fast fashion chain USC was taken into administration in January, resulting in numerous job losses, only to be bought out again a week later by Republic – another one of Ashley’s companies. Eyebrows were raised, and Ashley was called before a Commons select committee.

Unfortunately, he was unavailable, so he sent his chairman Keith Hellawell instead. The result was a painful grilling, in which it was revealed that the company withheld bills to suppliers ‘as a bargaining chip’, while Hellawell was forced to admit he hadn’t been told about the administration of USC until days before. Not something you’d find in the corporate governance handbook, to say the least.

2015-16: Workhouse accusations

Sports Direct uses zero hour contracts. It’s not alone in that, and like most firms that use them it says this gives employees much-needed flexibility.  But most firms don’t get the kind of treatment Sports Direct has for its working conditions. The company’s Shirebrook warehouse has been likened to a ‘workhouse’, with onerous (and off-the-clock) daily body searches, lists of banned clothes and a name-and-shame regime for lax employees.

Ashley denies this, but the media storm has caused a precipitous fall in the company’s share price since December (as of May 17, it had nearly halved in value). It’s also led the Commons BIS select committee to formally summon Ashley to answer questions on it.

Ashley refused, accusing the committee of being a ‘joke’ and ‘abusing’ Parliamentary privilege to create a media circus. While they debated whether to lock him in the Big Ben tower, Ashley went to the media again. This time, he took issue with former Labour leader Ed Miliband, a longstanding critic of Sports Direct’s HR record. 

‘I would love to get him in a boxing ring with a pair of gloves on and box his ears, that’s what I’d like to do,' he told the Mirror. Maybe in another life he could have been a PR?

The subliminal message - that Ashley would be no punching bag for MPs - didn't seem to sink in. Eventually Ashley caved. He's agreed to appear before the committee on June 7, so long as they take the tour at Shirebrook the day before to see conditions for themselves. Hardly an unreasonable compromise, but will Parliament see it that way?

'You need to know whether you are being invited to appear as an expert witness or to be given a public flogging' - How to appear before a Parliamentary committee

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