What’s good for Mike Ashley isn’t necessarily good for his company. This week the tycoon who founded the budget retailer Sports Direct sold a 4% share in the company, but while he bagged £100m for 4% of his share, the markets turned against the company, with shares subsequently losing 7% of their value.
Ashley still owns a 64% stake in the retailer, as well as his beloved Newcastle United football team. But Sports Direct Plc, which also runs the Lilywhites retailer and Slazenger and Dunlop sports brands, has lost considerable value as a result of the high-profile businessman’s sale of 25 million shares at £4 each.
Sports Direct chalked up a £125million pre-tax profit last year, which is good news for the employees as well as Ashley. After the collapse of many high street chains – the latest being HMV – many retail workers may think themselves lucky just to have a job. But Sports Direct operates a share bonus schemes, where loyal and hardworking staff are rewarded with a stake in the company.
Last summer it was revealed that thousands of employees had seen their share values increase to around £50,000 when the company posted better-than-expected profits. So news of a fall in share price as a result of Ashley’s sale will be a knock not just to outside investors, but to the people manning the shop floors.
Ashley is said to be eyeing an investment in one of the UK’s department stores – although not John Lewis, the chain that has a similar employee ownership scheme. He is said to be considering a move for House of Fraser, but at the moment it’s nothing more than rumour.
No comments:
Post a Comment