As Mike Ashley stood sweating under the lights of TV cameras in Sports Direct’s warehouse yesterday, he urged journalists to allow investors some room.
Everyone wore high-visibility jackets, but the shareholders were relatively hard to see.
The company’s founder had no real intention of listening to investors, though; he was just keen to manage the press.
In the end, at the retailer’s first public annual general meeting, investors revolted against management and launched a dramatic (if futile) bid to block the re-election of the chairman, Keith Hellawell.
Many voted for an independent review of working practices after allegations from the Business, Innovations and Skills select committee that Sports Direct was run like a “Victorian workhouse”.
Investors aren’t just battling an unwieldy majority shareholder on the board in the form of Ashley: they’re fighting his board-level minions, too. A “groupthink” has set in. It was evident earlier this week when the board refused the chairman’s resignation.
Hellawell, a former chief constable, denies he can’t stand up to the board.
He told City A.M. yesterday: “My past is dealing with child murderers and serial killers, do you think I’m going to have a problem saying no in a board meeting?”
Sports Direct is keen to show it can change. Leading 150 investors around Sports Direct’s warehouse, Ashley talked at length about how working practices have improved.
And he does feel passionately about the business that he founded and has a majority stake in. Yesterday when he was told he wasn’t doing enough, he threw into a rage.
Unite’s general assistant secretary Steve Turner stood at the AGM to say offering 12 hours of guaranteed work to people on zero-hours contracts wasn’t adequate. Ashley snapped and shouted at Turner: “Don’t pull me down while I’m trying.”
The room openly laughed at Ashley when he continued: “It is probably your fault we’re in this mess.”
Later, Hellawell defended Ashley, saying: "We all feel strongly about what's gone on...and sometimes I have an outburst, and sometimes other people have an outburst.”
One investor clapped.
Yesterday it was clear that Sports Direct will engage – but only on Ashley’s terms.
The company took everyone around its facilities, but the warehouse was empty and there was no one in the canteen. There were no customers in its giant, air-conditioned retail space.
Sports Direct will demonstrate how staff are searched when they leave for the day, but only if the staff-member being searched is Ashley.
He was eager to demonstrate how different he is from the Polish migrants he employs. He pulled out a huge wad of £50 notes during the demonstration, joking: “I’ve been to the casino.”
At the meeting, shareholders watched an internally-made video of Ashley announcing that one staff member will be made a board member.
He said he is answering Prime Minister Theresa May’s calls for more board-level representation for staff.
Meanwhile, investors spoke frankly about their discontent. Anita Skipper of Aviva Investors took the microphone to say to Hellawell: “Keith, you’re going to be staying on. We were going to talk about this in a meeting afterwards. If you say you’re going to listen to shareholders, is that topic still up for the discussion?”
Another large investor even threatened the under-fire chairman: “We won’t invest in Sports Direct unless we can speak to you.”
Nobody threw a fit at that; but Ashley did tell the tired auditorium: “I actually believe that Sports Direct being public is a good thing.”
BlackRock, Aviva, Standard Life and other institutional investors formed a concerned-looking huddle at the end of the day, moments before filing into a back room to meet Ashley.
Their mood was sombre, and perhaps rightly so. Ashley may be passionate about Sports Direct being public – but he seems disengaged from the people he’s sharing it with.