Frustrating though it may be, there’s a reason why the men and women in charge of large companies have their tongues guarded by teams of slick PRs. Like politicians more comfortable with the teleprompter than the debating chamber, they know all too well that every public utterance has the potential to become a soundbite. And if every word is going to be dissected by the media, it might as well be on message.
Alas for Mike Ashley – he didn’t get the memo. ‘We are in trouble, we are not trading very well. We can’t make the same profit we made last year,’ the Sports Direct founder told the Times as he was showing them round its Shirebrook warehouse.
Was that a profit warning? It certainly sounded like one, but where was the mandatory stock exchange statement? Smart though they are individually, as a group traders have a tendency to act like lemmings on Red Bull. They duly panicked, sending the share price down 10% in one day. The stock exchange statement, entitled ‘clarification’, turned up this morning, but the damage had been done.
What is Ashley to do? When he’s silent, people complain about it. When he says something, people complain about it. The problem of course is that he’s running a public business, when he really wants to be running a private one. Indeed, in the same ill-fated interview he spoke of his frustration with investors who were happy to go along for the ride when the going was good, but now want to know everything, lashing out at him from the ‘cheap seats’.
This problem won’t go away. Pandora’s Box has been opened, or rather fifty Pandora’s Boxes have been opened and the woes within are going cheap. So long as Sports Direct’s reputation continues to hit its bottom line – whether through staff morale or consumer reticence – Ashley’s fellow investors will have cause to complain.
It’s impossible to imagine Ashley will assuage the concerns of Guardian journalists and MPs alike, even if he does bring about real changes and a new era of transparency – the company’s reputation among investors won’t fully recover unless Ashley sells. Somehow that seems unlikely.
The alternative is more of the same silent treatment, interspersed with news-worthy outbursts. Unless of course the share price continues to tumble to truly bargain basement levels. Then, who knows, Ashley could just sell a few properties and take the company private again. Problem solved, eh.