Mike Ashley reputation hurts Sports Direct as profits plummet 60%, claims study
Sports Direct has reported a 60% annual drop in profits, a slump that has been blamed on the decline of the pound by chief executive Mike Ashley, however, research from the Reputation Institute has partially linked the misfortune to the reputation of retail mogul.
Sports Direct profits down 60%
The company, which issued a profit warning in January 2016, has been linked with numerous staff mistreatment scandals and has dropped out of the FTSE 100 since. The data “demonstrates a strong link between reputation and financial performance” according to the Reputation Institute – and it reads as follows.
Sports Direct’s reputation score in Q1 2016 was ‘weak’ at 53 out of 100, in the following year this has plunged a further 11 points to 42, almost landing it in the ‘poor’ category reserved for the worst thought of brands.
After being grilled by MPs over workplace standards, Ashley has vowed to reinvigorate the brand time-and-time again, as a slew of negative headlines stack up against the billionaire, and his retail empire.
Workplace scandals, issues around the group allegedly spying on inspectors and more, have saw the public’s view of Sports Direct’s workplace and leadership decline 16 points to 27 out of 100 and 14 points to 42, respectively.
Notably, the company upped its products and services reputation from 57.1 to 64.2, bringing it into the ‘average’ category on that front.
James Bickford, managing director of the Reputation Institute, said: “In order to see any kind of financial and reputational improvement Sports Direct needs to address its many issues. Its priorities should be twofold; effort needs to go into new initiatives to address workplace, leadership and corporate governance issues, and then there needs to be a comprehensive strategy for communicating that these initiatives have been implemented.
“It may also help if the importance of a company’s reputation is impressed upon Mr Ashley.”
Earlier today (Thursday 20 July) the brand announced a partnership with Nike, to become the ‘Home of Football’.
It comes as part of a long-term drive to become the Selfridges of Sport.