All Change At Sports Direct
Keith Hellawell, Chairman of Sports Direct, steps down.
He resigned from his position as Chairman of Sports Direct when it emerged that shareholders would be unlikely to re-elect him at the company’s annual general meeting.
His decision to step down is not entirely unexpected. At the AGM last year, he was re-elected with just over half of the votes, with only 53% of independent shareholders supporting him.
It was at this meeting that he announced he would resign from his position in the next year if he failed to win the support of shareholders again, and last Wednesday he made good on this promise.
However, his resignation has been far from a quiet affair.
Mike Ashley, the famous, or infamous, boss of the company subsequently launched a vehement attack on his firm’s shareholders, announcing that they had stabbed both him and the company in the back by failing to support Mr Hellawell.
Mr Ashley, who was once the former chief constable of West Yorkshire Police, has faced repeated criticism about working conditions in both the manufacturing and retail aspects of his business, including not allowing staff members to take toilet breaks, and actively encouraging them to work beyond their allocated shift times without remuneration.
However, it seems that while these criticisms may have impacted upon the decisions of shareholders, a new chairman might help Sports Direct to enter into a new era free from these stigmas, and the share price might benefit from this too.
Currently standing at 42 points below its last YTD figures, and over 100 points from its high in July 2018, the company dropped another 28 points on the day Mr Hellawell’s resignation was announced.
This sudden drop in market value did not last, however, with the price returning to its previous value within 24 hours and remaining largely stable.
Mike Ashley bought House of Fraser last month for £90 million after it had collapsed into administration and plans to revive it, although the actual plans for this have not yet been released. However, if House of Fraser returns to its previous status as a traditional department store, this would have significant benefits to Mr Ashley’s reputation and that of Sports Direct too.