Mike Ashley: I want to be one of the big fish
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Mike Ashley has defended Sports Direct’s strategy and said he still has faith in High Street retail.
“It’s going to be a lot smaller pond, but the fish are going to be enormous. I want to be one of those enormous fish,” he told the BBC.
His comments came after a difficult annual general meeting (AGM), where shareholders criticised his strategy.
The businessman admitted he had bitten off more than he could chew with the firm’s slew of recent purchases.
Sports Direct has admitted that last year’s £90m acquisition of House of Fraser was a mistake, describing problems at the department store chain as “nothing short of terminal”.
But investors have also questioned Mr Ashley’s readiness to buy up a range of other brands including Jack Wills, Evans Cycles, upmarket clothing outlets Flannels and Cruise, and lingerie firm Agent Provocateur. Sports Direct is also in the process of taking control of Game Digital.
Mr Ashley owns 62% of Sports Direct shares, but at Wednesday’s meeting nearly a quarter of Sports Direct independent shareholders registered unhappiness with his strategy.
While Mr Ashley said it was clear that online shopping was eating into High Street sales, he said Sports Direct was not alone in continuing to put its faith in “bricks and mortar” retail, citing TK Maxx, Primark and Next.
“I’m not a clicks man, I wasn’t born in the clicks era,” he said. “I’m a bricks man, I believe in bricks.”
But he said he understood shareholders’ unhappiness at recent events., which include a more than 20% drop in the firm’s share price over the past year, a chaotic delay to publication of its annual results, a surprise €674m (£605m) tax bill in Belgium and the resignation of its auditing firm.
“If I were a shareholder I would would be very frustrated by those events,” he admitted. “It’s not acceptable.”
Mr Ashley also said he had an “obsession” with appointing one of the top four accountancy firms to replace Grant Thornton.
However, at the AGM shareholders were told that the firm had still not appointed a new auditor. In such circumstances the government can step in to appoint an auditor, a move which Mr Ashley said he would not oppose as long as the firm was of sufficient calibre.
He said he was determined to appoint one of the largest firms to rehabilitate Sports Direct’s reputation.
“If you’re Sports Direct and you’re always accused of X, Y, Z, you run it on the back of a fag packet, you say lets have a top four auditor and lay out the dirty washing you’ll find its very clean,” he said.
Mr Ashley said if one of the big four took on the challenge of being Sports Direct’s auditors he would pay them £2m and they would only need to cover one year.
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