Keith Hellawell appearing before the Scottish Affairs Committee today (Source: parliamentlive.tv)
Sports Direct chairman Keith Hellawell faced a grilling by MPs today over the company's administration of USC - but if Mike Ashley thinks he dodged a bullet in not appearing, he might want to think again.
Chairman Ian Davidson MP and the rest of the Scottish Affairs Committee quizzed Hellawell, who appeared as the sole representative of Sports Direct today, for two hours before breaking to vote.
The former drugs tzar Hellawell, who appeared instead of the company founder, insisted Ashley had never refused to attend, and would be prepared to meet MPs.
Davidson seemed incredulous though, pointing out that MPs had resorted to contacting Sports Direct's PR because they could not find an address for the famously publicity-shy Ashley.
If today's hearing is anything to go by, Ashley can expect some pretty tough questioning from MPs who appeared at times angry and frustrated with the company chairman. Much of the focus was on USC's administration, which resulted in around 200 redundancies at the chain's Ayrshire warehouse before it was bought out by sister company Republic.
Davidson claimed management had no need to shut the Dundonald warehouse, saying they had “callously and deliberately developed a situation where employees got 15 minutes' notice”.
During questioning, he claimed Hellawell had “tried to hide behind the administrators and say the bad boys did it”.
The chairman - who frequently was unable to answer questions put to him - insisted it was a last-minute decision, prompted by the landlord of the warehouse refusing access over unpaid rent. “I wouldn't call it callous,” he said. “It was a business decision.”
While admitting that it was the threat of Diesel pulling out that had acted as a catalyst for USC's demise, Hellawell also lifted the lid on Sports Direct's apparently aggressive relationships with its suppliers.
The retailer withholds payment to suppliers and landlords in order to secure better prices, he admitted, prompting one MP to dub the business a “back street outfit”.
Hellawell said he would ask “searching questions” of management over the tactic.
Suppliers “did not like” Sports Direct's cheap pricing strategy, Hellawell added. “It wasn't that USC had bad debts, it wasn't that we couldn't pay, it was because of our pricing strategy,” he explained.
“We have relatively low margins, and we sell things very cheap.”