Could You Live with a Personal Loss of a Billion Quid? Ref: Sports Direct.

Comments

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   turbograndad

   11 January 2016, 01:51

   It has an image problem, apart from fat chairman, who ate all the pies, it is a low grade controversial enterprise, and the stores are like bargain basement for scratters, RIP.

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   James

   11 January 2016, 02:05

   Malcolm,
   As someone who enjoys running, I can say that I buy my running clothes from professional sports shops and do not include Sports Direct within this definition. I have never understood the appeal of their jumble sale style layout and having taken a closer comparison at a particular running top I wanted, found it at a virtually identical price to the Nike store also selling it, making me question whether the prices in Sports Direct are really a good deal (do the price boards around the store and lack of layout try and persuade shoppers otherwise?). I wonder whether the appeal of the so called “sports casual” look where non-sports inclined people like to wear sportswear drives a large proportion of Sports Direct sales? Further, living outside the UK, I question the expansion of the company. In the capital city I live in, the company have chosen poorly for their store locations and I would not be surprised if footfall was therefore disappointing. It therefore prompts the question as to how well executed the expansion has been and whether the numbers tell a different story.
   For me, the combination of seemingly poor employee relations, repeated corporate governance failings and an unpredictable use of shareholders money to take stakes in other companies makes it a company I would not invest in. In a growth phase, investors may have been willing to overlook some of the above issues to some extent, but now the company looks to be in more mature market conditions, these issues are of higher significance. The company needs at the very least, its “Ryanair moment” when it changes course sharply, but I struggle to see upside for it at present.

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   Lonster

   11 January 2016, 02:19

   I see this blip as temporary, spending a lot of time in central Europe I have seen Sports Direct open some mega stores in the region. When you consider that east Europeans typically wear sports clothing most of the time and many are loyal to regional brands, I can see Sports Direct having a major say in sports retailing. So many brands in the region we’ve never heard of in the UK (such as Hannah, Moira, Columbia, etc) and he’ll snap those up in due course. He buys the brand and then sells them in his stores, expanding his offering, expanding his empire and expanding his profits and thus expanding his waistline ever further.

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   Duck and Dive

   11 January 2016, 03:54

   The nearest most of Mike Ashley’s customers get to participating in sport is sprinting to the betting shop to get on the 2.40 race at Wolverhampton. A survey a few years ago revealed that a scary number – around 30% ISTR – were unemployed…spending their benefit money on a new pair of cheap trainers.

   Just as well since a clear majority of adults never participates in any sport.

   Sports Direct is being hurt by the High Street malaise, by the new minimum wage and by increasingly close government scrutiny. Its investments in other retailers aren’t working out well and Ashley has suddenly stopped appearing at his AGM.

   Surely no-one enjoys shopping at any of his outlets, nor visiting his badly-designed website. The customers he gained from the demise of JJB now seem to prefer shopping at JD Sports. And inexorably, the discount supermarkets and the inexorably expanding sports discount warehouse, Decathlon, are eating into Ashley’s business. And with ASDA trialling a number of Decathlon shops-within-shops, the writing could soon be on the wall for Sports Direct’s crude and outdated retail model.

   There also seem to be a growing number of people in high places – including some of his institutional shareholders – out to “get” Mike Ashley and I think it’s possible he will step down from the business…which won’t necessarily help the share price.

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   Phil

   11 January 2016, 04:58

   Trouble isn’t just with Ashley although his behavior is a contribution. You could take an Ashley store, lift it up and dump it into any Car Boot or market stall and you wouldn’t see a difference.

   Some of High St chain public shareholding retail is in trouble, no question. The biggest problem as I see it, it is making the High St boring. Go to one, go to them all. It is doesn’t fit in Bury it wont fit you in Basildon. The real problemo, you get it right in one, you get it right in them all. You get it wrong in one and you are going to get a profit warning.

   Shoppers are leaving these chains, there is a big uptick in ownership SME High St retail as the High St plays fightback against the chains These shops are interesting, different and people like them, especially women. If you cannot respond to British women shoppers then you are just so over. Women have stopped trusting this type of business, to much press, to many bad stories, and just so so boring.

   Banks, Big Business et al, just so over with the public. Too manipulative, voyeuristic, issues of trust, quality, price Great for chains, not good for shopping tribe .

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   Malcolm Stacey

   11 January 2016, 12:52

   Thanks, gang, for some very useful stuff here. Once again it proves that Shareprophets readers go pretty deep and think of lots of pros and cons for companies that I don’t.