Sports Direct's Mike Ashley says it would be best for him to go if his company strategy fails

Keith Hellawell (centre) speaking at the Sports Direct annual general meeting 2016.Keith Hellawell (centre) speaking at the Sports Direct annual general meeting 2016.
Keith Hellawell (centre) speaking at the Sports Direct annual general meeting 2016.
Sports Directs Mike Ashley has said it would be best for him to go if he fails in his strategy to fix the company.

He made the comments after Sports Direct Shareholders rejected the reappointment of its chairman to the board at a heated annual general meeting yesterday.

A 53 per cent majority of independent shareholders voted against chairman Keith Hellawell and more than a third voted against the rest of the board.

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The vote came amid major criticism over working practices and the way the company is run.

Mike Ashley said: “I am a man who gets some things very right and other things very wrong.

“If I keep failing and keep failing and keep failing it will be best for everybody if I go.

“But let’s give me some time to see if I can fix the problems first, please.”

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Mr Hellawell said he had offered to resign but had been unanimously asked to stay on as chairman.

He said: “If by the end of the annual general meeting next year I don’t have the support of independent shareholders I will step down.”

Mr Hellawell said it had been a particularly challenging year for the group and performance had been disappointing.

His comments came after the retailer said earnings are expected to come in at £300 million for the year, down from last year’s £381.4 million.

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On Tuesday, Sports Direct announced a raft of measures aimed at addressing concerns over working practices at its Shirebrook warehouse.

A report commissioned by the firm, it apologised for conditions at the warehouse, which have been likened to those of a Victorian workhouse.

An investigation by the Chad in 2014 first exposed the operational practices at Sports Direct, including its controversial ‘strike’ system and policy of strip-searching all employees before they are allowed to leave the site - placing them below the threshold of the Minimum Wage.

The investigation, which was later picked up by the BBC and the Guardian Newspapers, came about after a migrant worker gave birth in the toilets of the company’s main distribution hub in Shirebrook, allegedly because she was too scared of losing her job if she asked to go home.

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The company’s notorious six strikes policy has been suspended by the agencies with immediate effect.

The report commissioned by the company said the strikes policy was a blunt instrument which left too much ‘subjectivity’ in the hands of too few people.

It will be replaced with Sport Direct’s grievance and disciplinary procedure already used for permanent employees.

The meeting was told a policy was now in place to ensure all warehouse staff are paid above the National Minimum wage .

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A previous breach of the National Minimum Wage in the warehouse was ‘unacceptable’.

The report by RPC which identified serious shortcomings was to act as a bench mark for the 360 degree review to be put before shareholders on 2017.

It has also pledged to offer casual retail staff at least 12 guaranteed hours a week, instead of zero-hour contracts – but almost all staff at the warehouse are agency workers making them ineligible for the new contract.

The company says it is introducing a pilot programme of transferring ten people a month from agencies to permanent staff positions.

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Sports Direct said: “The board announces it has received the Working Practices Report from RPC, one of the company’s legal advisers, which captures progress made in the last 90 days by the business to investigate, review and where appropriate start to address shortcomings in employment practices.

“In light of the report, today the Board announces it has requested RPC to lead a further comprehensive review of working practices that will use this report as a benchmark to identify what further action is required and to monitor steps already undertaken.

“The review will also include examining the company’s corporate governance, and as part of this process, the board will engage with shareholders to obtain their views. “This comprehensive review of working practices and corporate governance will take place over the next 12 months and be presented to shareholders in 2017.”