Sports Direct vows to 'become the Selfridges of Sport’ as it braces for 20% profits plunge
Sports Direct has made the bold and bizarre claim that within the next four years shoppers will see it as ‘the Selfridges of Sport’, referring to the luxury department store.
It seems like a bit of a leap for the company, which was recently exposed for its horrific working conditions in a government-backed investigation.
The ambition was revealed in a presentation slide released this morning (7 September) ahead of the company’s AGM.
The slide goes into little detail about how it plans to achieve this, saying only that it will be underpinned by a ‘360-degree review’ which will take place over the next 12-months.
Within this review, it’s working practices and employment model will be looked at as well as corporate governance and its corporate reporting and communications strategy.
Of the latter, Sports Direct has said that it is looking to be “very open”, another surprise given its lack of transparency on matters such as chief executive Mike Ashley’s brother in-law’s firm being used for its international deliveries.
"We recognise that is important to be more transparent" said chairman Keith Hellawell (who, incidentally, tried to step down from the role ahead of the AGM but was told to stay on).
More detail on the review and how it will attempt to transform the brand is expected later today.
Despite many jibes already being made at its lofty ambition to emanate one of the UK's most well-known and respected retailers, the desire for Sports Direct to focus on rebuilding its brand is desperately needed.
Rather than investing in marketing activity, it has simply hoped that a 'stack it high, sell it cheap' retail model would be enough of a draw for today's consumers.
It's clear from the warning to the City this morning that this strategy has not been viable for some time.
Sports Direct said it’s profits are expected fall by 20 per cent this year. It is likely to post underlying earnings of around £300m this financial year, down from £381m in 2015-16.
Shares were down 10 per cent in early trading but stabilised around seven per cent lower.
More to follow as the AGM progresses...