Written by: Keith Tully
Reviewed: Wednesday 8th June, 2016
Mike Ashley, founder of the sportswear retailer Sports Direct, has conceded to a committee of MPs in Westminster that his company was guilty of paying members of its workforce at a rate below the National Minimum Wage.
The admission came in response to questions about conditions at a Sports Direct warehouse facility in Derbyshire, which last year became the focus of an undercover report by the Guardian newspaper.
The report claimed that staff at the site were routinely expected to undergo lengthy and rigorous personal searches before and after their shifts which required them in effect to work longer hours than they were being paid for.
Mr Ashley admitted on June 7th that this was indeed the case, saying: “On that specific point, for that specific point of time, yes.”
He added that an internal investigation into conditions at Sports Direct’s Shirebrook facility in Derbyshire found evidence of practices whose discovery Ashley described as being an “unpleasant surprise”.
He also said that HMRC is now investigating Sports Direct in relation to issues around minimum wage, which could see the company hit with substantial fines.
The admissions from Mr Ashley in conversation with MPs represented a significant shift in tone from Sports Direct’s leadership, who initially issued a statement in response to accusations of paying staff below minimum wage that read: “Sports Direct believes it’s in compliance with minimum wage regulations and takes its responsibilities extremely seriously.”
Ashley, who owns Newcastle United Football Club as well as Sports Direct, also told MPs that he was “100 per cent” interested in acquiring BHS after it entered administration in recent weeks.
“It offered that extreme value that Sports Direct is known for and that’s why I think it was a fit. You could have had Sports Direct upstairs and BHS on the ground floor,” he said on the prospect of the two retailers coming under the same ownership.
Without giving much away on his understanding of why a deal for Sports Direct to buy BHS out of administration did not go through, Ashley hinted that he had concerns about the state of the business and the way it had been run prior to its recent collapse.
“I think you’ll probably discover a lot for yourselves at a future date, which is a shame,” he said.