Sports Direct having a bad day

[Parky]

It's the City's own fault for hyping up his stock and paying over the odds, and why the fuck should a man renowned for holding the corporate world with disdain, care a fuck about their protocols. The SE seem pissed because they've been slightly fleeced, yet they are experts at it. What comes around....

 

That is it in a nutshell. Pot kettle scenario extraordinaire...

[Guest Knightrider]

And with Ashley now being owner of NUFC, the vitriol will crank up a few extra notches.

 

Watch out for Sheiks Mike.

[Unbelievable]

It's the City's own fault for hyping up his stock and paying over the odds, and why the f*** should a man renowned for holding the corporate world with disdain, care a f*** about their protocols. The SE seem pissed because they've been slightly fleeced, yet they are experts at it. What comes around....

 

So does anybody know what the man thinks about football fans from the North East of England?

[Minhosa]

It's the City's own fault for hyping up his stock and paying over the odds, and why the f*** should a man renowned for holding the corporate world with disdain, care a f*** about their protocols. The SE seem pissed because they've been slightly fleeced, yet they are experts at it. What comes around....

 

So does anybody know what the man thinks about football fans from the North East of England?

 

To be honest, I'm not sure it really makes any difference.

 

He's a businessman, NUFC is a business and one of the positive factors when he bought it would be the (virtually) guaranteed sell-outs at home.

 

Whether they're sold out with passionate fans or silent disinterested types doesn't make a bit of difference as long as they're paying their way and that income stream is nailed on.

 

We might like to think, or to read in the press, that we, as the clubs supporters are some kind of irreplaceable force when in all reality we're just numbers and a good thing about the club.

 

Not being negative, btw, just realistic.

[Dave]

It's the City's own fault for hyping up his stock and paying over the odds, and why the f*** should a man renowned for holding the corporate world with disdain, care a f*** about their protocols. The SE seem pissed because they've been slightly fleeced, yet they are experts at it. What comes around....

 

So does anybody know what the man thinks about football fans from the North East of England?

 

To be honest, I'm not sure it really makes any difference.

 

He's a businessman, NUFC is a business and one of the positive factors when he bought it would be the (virtually) guaranteed sell-outs at home.

 

Whether they're sold out with passionate fans or silent disinterested types doesn't make a bit of difference as long as they're paying their way and that income stream is nailed on.

 

We might like to think, or to read in the press, that we, as the clubs supporters are some kind of irreplaceable force when in all reality we're just numbers and a good thing about the club.

 

Not being negative, btw, just realistic.

 

Spot on. Not sure it matters or even helps to be someone who 'knows' the fans.

[Mick]

 

Spot on. Not sure it matters or even helps to be someone who 'knows' the fans.

 

It could be a plus point, I really think that we'll benefit for having someone who isn't a fan and who can distance himself before making decisions.

[Mr Logic]

It is a tad ironical though that Shepherd was villified for taking the supporters cash and yet this guy stands to do it a lot more and we won't even have a clue how much.

 

It's okay as long as he brings success with it though, which at the end of the day is what we are hopefully paying for.

[Matt]

The fact that Ashley made so much off the float shows that he's a shrewder operator than some of his highly-qualified city detractors suggest.

 

So what if the City will never trust him again? He's set for life.

[Guest Invicta_Toon]

The fact that Ashley made so much off the float shows that he's a shrewder operator than some of his highly-qualified city detractors suggest.

 

So what if the City will never trust him again? He's set for life.

 

 

I think running NUFC can dent your fortune by quite a few million a year

[Guest sicko2ndbest]

Think this tells us a lot about Ashley. If you havnt read it it is well worth a read

 

From The Sunday TimesJuly 29, 2007

 

Sports Direct’s Ashley hits back at City 'cry babies'

Mike Ashley has rarely spoken to the press, but now that the share price of his sports group has halved since the float in February, he explains why his City critics should stop whingeing and start thinking long termJenny Davey

JUST a week ago, Mike Ashley was basking in sizzling sunshine on the beach in Marbella, knocking back lagers and lime. He mingled with 200 guests at a party to celebrate the 40th birthday of Gadget shop founder Chris Gorman, then headed back to Britain on Sunday night.

 

But when the billionaire sportswear tycoon touched down at Luton airport, he didn’t expect that only 36 hours later he would be facing heat of a very different kind.

 

His company, Sports Direct, owner of the Lillywhites store in London’s Piccadilly and brands such as Dunlop, Slazenger, Kangol and Lonsdale, issued a profit warning last Tuesday that wiped 22% off its stock-market value in a day. The shares have more than halved in value since the firm floated in February and Ashley and his board have disappointed analysts with their reluctance to engage with the City.

 

Investors who backed the £2.2 billion flotation only five months ago have started baying for blood. Ashley received a mauling in the following day’s newspapers.

 

Related Links

Sports retailer Ashley says City is full of ‘cry babies’

On Wednesday evening, as he sat in the bar of the Four Seasons hotel on London’s Park Lane dressed in a casual shirt and ripped jeans, he was more determined than ever to rebuild his reputation and redouble efforts to turn Sports Direct into the world’s biggest and most profitable sports retailer.

 

“I’ve got balls of steel,” said Ashley. “Some investors have been great and have been very supportive. But some of these City people act like a bunch of cry babies. I’m not giving in. I think the shareholders will divide into two distinct camps. I want a loyal band of followers – long-term shareholders who aren’t on the phone every five minutes just because there’s a share-price movement up or down. Sports Direct should come with a government health warning – this stock is not for the fainthearted.”

 

It has taken Ashley more than two decades to build Sports Direct, so he finds the City’s short-term outlook dispiriting.

 

“I am building a long-term business,” he said. “I can’t spend all my time worrying if the share price goes up and down. It may drop to 80p, but over three years I am betting it will be nearer 800p. I have built the company over 25 years and I am planning the next 25 years. But all anyone wants to talk to me about is what happened in June.”

 

The criticism has come thick and fast over the past few days. It would be easy to forget that Sports Direct’s 2007 numbers were in line with City forecasts and the business delivered a 31.8% increase in earnings before interest, tax, depreciation and amortisation to £191m for the year to the end of April.

 

Instead analysts focused on the failure to release like-for-like trading numbers. Ashley insists like-for-like sale figures make no sense in sports retailing.

 

“Every other year there is a big football tournament, so you are always comparing a tournament year with a nontournament year. We have always said that we wouldn’t give the figures, but then people turn around and act surprised when we don’t.”

 

His unconventional style has come under fire, notably after it emerged that Ashley settled a row over fees by playing a game of spoof, the coin guessing game, with Simon Mackenzie-Smith, head of UK investment banking at Merrill Lynch.

 

“What do I regret about it? I should have said ‘three’,” Ashley quips. (Ashley guessed two and lost the game.)

 

Ashley, whose favourite song is Wild Boys by Duran Duran, courted further controversy by personally amassing a 3.14% stake in Adidas just weeks after the Sports Direct float. He admits he made a mistake but insists he subsequently offered the stake to the company at cost price but the deal was blocked by the board.

 

“It was showing a €50m (£34m) paper profit. I even guaranteed to take it back at the price paid if it fell in value,” he said. “Not taking it was the worst decision, in my opinion, in 25 years of the company.”

 

Then, at the end of last week Sports Direct splashed out £48m of company money to buy a 1% stake in Adidas, one of Sports Direct’s biggest suppliers – a move that provoked further howls in the City.

 

Another controversial deal has been Ashley’s personal acquisition of Newcastle United Football Club. Where Ashley does show contrition is over the poor communication with the City. Only weeks after the float he sacked his public-relations adviser, Tulchan. He then fell out with David Richardson, his nonexecutive chairman, who quit in frustration at the way Ashley regularly flouted corporate-govern-ance guidelines.

 

He regrets certain parts of Sports Direct’s stock-market debut – most notably not having an investor-relations executive in place before the float.

 

He is set to hire one soon and find a full-time chairman to help guide the business through its ambitious expansion plans.

 

Even though the company has halved in value, Ashley said he had no plans to take it private.

 

“The float has actually put Sports Direct back in some ways, but I see it as two paces forward and one pace back.

 

“The current share price is pathetic. I can’t think of many safer long-term investments at this price. What annoys me the most is that some people are saying they didn’t get what they bargained for. In my opinion they got exactly what it said on the tin.”

 

THE STORY of Ashley’s rise is an extraordinary one. He was only 16 years old when his parents, Keith and Barbara, mortgaged their bungalow and gave him £10,000 to buy the lease and stock of a sports store in Maidenhead, Berkshire, which he renamed Mike Ashley Sports.

 

His father was a production manager at Young’s Seafoods and his mum was a secretary, but this tightly-knit family put their backs into making the shop a success. Ashley’s dad did the books at the weekend and his mum often helped out in store.

 

There remains a family involvement – Ashley’s elder brother John is the Sports Direct IT manager. “He’s very academic – he’s an IT genius, genuinely. He’s like super-bright – the opposite of me. I call him Albert, after Einstein, because he is so brainy. I’m streetwise – he’s not streetwise – we complement each other,” said Ashley.

 

Bob Mellors, the finance director, nicknamed the Captain, has also been with Ashley since the start. The company’s board is a close-knit team and they often socialise with each other. “Some of our best nights out are impromptu – a few beers and then down the kebab shop. We still tell the same old stories, like the time I fell down the fire escape in the Maidenhead store and we still laugh and think it’s funny.”

 

Ashley was born in Walsall, but grew up in Burnham, near Slough. Never very academic, he left school with only one O-level, a C in economics and public affairs. He is not even sure if that is correct – maybe he got the C in the mock exam, he laughs.

 

One thing he did excel at was squash. He became a county coach but that ended when he began working at the sports shop full-time.

 

With the help of his parents, who showed unstinting support for their youngest son, he helped to build the store into Britain’s biggest sportswear retailer. By entrepreneurial flair and determination, he built a business with sales of more than £1 billion.

 

Ashley, nicknamed the Young Emperor by billionaire retail magnate Sir Philip Green, transformed sports retailing, buying brands such as Donnay, Lonsdale, Slazenger and Karrimor, and turning them, in effect, into his chain’s own labels. He has also bought up rival firms, including Hargreaves and Gilesports.

 

Sales and profits rose in a scarcely faltering upward trajectory. The success culminated in Sports Direct’s £2.2 billion flotation at the end of February.

 

Ashley has built a giant distribution centre in the unlikely outpost of Shirebrook, a former Derbyshire pit village.

 

Using his muscle as the biggest sportswear retailer in Britain, Ashley sources his stock cheaply direct from the Far East. He uses those cost savings to slash the prices of big brands such as Adidas or Nike. Once the customers are instore, the hope is that they will also buy some of the brands he owns.

 

Bit by bit, Ashley, who jets around in a company helicopter, is adding new brands – in the past few weeks alone snapping up Field & Trek and Everlast, the American maker of boxing equipment, and entering talks to buy Evans Cycles.

 

“We describe the plan as like a jigsaw or a mosaic. First of all we need to get all the pieces together. And it takes an awful lot of pieces to become the world’s biggest sportswear retailer.

 

“It’s a bit like I was a good squash player in Slough . . . but was I any good nationally? I was not really in their league. It’s a good analogy. Getting to be No 1 in the UK is one thing, but getting to be No 1 in the world is on a totally different scale.”

 

ASHLEY pocketed more than £929m from the Sports Direct float but he retains a 57% stake in the listed company and remains as down-to-earth now as the day he started in business, according to friends.

 

Ashley insists he hasn’t been on a big spending spree since the float. “You have to remember that I wasn’t exactly skint beforehand. You can do exactly the same with £100m or £1 billion. I’m not being funny but you struggle to spend the interest on £1 billion.

 

“I bought myself a red Ferrari for my 40th birthday and I go to fabulous places and I don’t have to worry about what they cost. I go to Sandy Lane or to Mauritius, but I first went there when I was 18.”

 

Family remains critical to Ashley. He has three children – Oliver, 17, Anna, 15, and Matilda, 10 – from his marriage to Linda, which ended in 2003 with a £50m divorce settlement.

 

He has no plans to remarry at the moment. “I can afford many things but getting married isn’t one of them and I’m talking from experience,” he jokes.

 

“My two loves are my business and my kids.” His children spend most weekends at his home in Totteridge, north London, which was once the residence of the record producer Mickie Most.

 

This summer, as every year, he will spend three weeks with the children in California.

 

When Ashley isn’t working or with his family, he is out partying or gambling with his best friend Paul Kemsley, the Tottenham Hotspur director and property entrepreneur. The pair regularly spend nights at the Fifty club in St James’s.

 

“Many of the most successful people I know are gamblers,” he said. “My view is that when you get up on Monday morning you are in the risk business. But there is a fine line between an entrepreneurial investor and a gambler.”

 

“People say: how do you play poker? My answer is ‘all in’ – I’ve always been the same.”

 

By his own admission Ashley is consumed by a “ferocious” desire to succeed. He believes that one day Sports Direct could be a £4 billion company.

 

His blueprint for the future is clear – Sports Direct will need to expand into mainland Europe, take 100% ownership of more brands and acquire large strategic stakes in others. Will the plan for global domination succeed?

 

“My view is that if we fail we will still achieve a lot more than we would have if we didn’t try. I have spent most of my life attempting the impossible and missing, but achieving the nearly impossible.”

 

[ChezGiven]

The quotes from John Pritchard in the inset article in the paper are the most telling about the relationship between Sports Direct and the city.

 

Poor John cant get his forecast model to work because of the year on year variation in retail sales due to b-annual major tournaments affecting demand. So he spat his dummy out. 

[Mr Logic]

A long but worthwhile read as it lets you see a little more about who Ashley is and how he operates. Even if he took the club over on a whim (very doubtful) or as a hobby (also unlikely) the guy lives and breathes to be successful. We, as a club, should do alright out of it in terms of on the field results.

 

And those that made a few grand selling Newcastle Utd. shares to him should probably go and buy Sports Direct shares with the money.

[Guest Raglanlad]

He is made out to be a gambler - "all in" and all that. How appropriate that he purchased NUFC.

 

Maybe he is just a bit touched?

[Guest Dr. Richard Kimble]

All those analysts are a bunch of parasites tbh. If they had any really useful information they wouldn't be gassing it to public but getting some sly trades in.

[Guest sittingontheball]

"Wild Boys" at SJP? Jesus Wept!

 

 

[Lloydie]

Guardian reports rumours from the city - Ashely not happy with the results of his review, might be interested in getting out

 

http://football.guardian.co.uk/Columnists/Column/0,,2138169,00.html

 

Just like football rumours mind, could be bollocks.

[Guest hagler]

lager and lime?......id be drinking sol with lime stuffed down the neck

[Guest hagler]

Guardian reports rumours from the city - Ashely not happy with the results of his review, might be interested in getting out

 

http://football.guardian.co.uk/Columnists/Column/0,,2138169,00.html

 

Just like football rumours mind, could be bollocks.

 

im getting the feeling that all levels of the press just dont seem to like nufc

[Slugsy]

What a load of bollocks, Mort and Ashley have bought businesses before, they clearly had due diligence performed on the business, if they didn't know what the debt position was of the business before they bought it then they are not fit to be running a hot dog stand let alone a PLC or a football club!

[brummie]

What a load of bollocks, Mort and Ashley have bought businesses before, they clearly had due diligence performed on the business, if they didn't know what the debt position was of the business before they bought it then they are not fit to be running a hot dog stand let alone a PLC or a football club!

 

Didn't he do the deal to buy the club overnight or something?

[Slugsy]

What a load of bollocks, Mort and Ashley have bought businesses before, they clearly had due diligence performed on the business, if they didn't know what the debt position was of the business before they bought it then they are not fit to be running a hot dog stand let alone a PLC or a football club!

 

Didn't he do the deal to buy the club overnight or something?

 

Not a chance, have you seen Mort's CV?  The guy is a top class M&A advisor, there is absolutely no way he would have advised Ashely to spend £133m without getting access to the books and being able to ascertain the debt position of the business.

 

Given that it was an all cash deal, there wouldn't have been the pressure from a bank to get DD done but it would be truly amazing if he hadn't ascertained what the enterprise value of the business was before purchasing it.

[brummie]

What a load of bollocks, Mort and Ashley have bought businesses before, they clearly had due diligence performed on the business, if they didn't know what the debt position was of the business before they bought it then they are not fit to be running a hot dog stand let alone a PLC or a football club!

 

Didn't he do the deal to buy the club overnight or something?

 

Not a chance, have you seen Mort's CV?  The guy is a top class M&A advisor, there is absolutely no way he would have advised Ashely to spend £133m without getting access to the books and being able to ascertain the debt position of the business.

 

Given that it was an all cash deal, there wouldn't have been the pressure from a bank to get DD done but it would be truly amazing if he hadn't ascertained what the enterprise value of the business was before purchasing it.

 

In that case, then, I summise that this entire story is a load of bollocks and not worth worrying about.

 

I'm guessing that they've seen SA is slow in the transfer market, which leads to speculation about his relationship with MA, which is followed by problems at Sports Direct, which then leads people to the next natural assumption, that all is not sweetness and light at the club. Which incidentally also fires off those "Martins for sale" stories.

 

A series of baseless assumptions.

[Guest TPIB]

What a load of bollocks, Mort and Ashley have bought businesses before, they clearly had due diligence performed on the business, if they didn't know what the debt position was of the business before they bought it then they are not fit to be running a hot dog stand let alone a PLC or a football club!

 

Didn't he do the deal to buy the club overnight or something?

 

Not a chance, have you seen Mort's CV?  The guy is a top class M&A advisor, there is absolutely no way he would have advised Ashely to spend £133m without getting access to the books and being able to ascertain the debt position of the business.

 

Given that it was an all cash deal, there wouldn't have been the pressure from a bank to get DD done but it would be truly amazing if he hadn't ascertained what the enterprise value of the business was before purchasing it.

 

Totally agree, the club was a PLC for heavens sake, there could be nothing "hidden" that wasn't in the accounts and therefore available for Ashley's team to see before he swooped.

 

The strategic review is probably more about restructuring debt etc. rather than discovering more invisible debt.

[Guest Breezer]

does anyone think Mike Ashley look a bit like Paul Potts or is it just me?!

[Slugsy]

What a load of bollocks, Mort and Ashley have bought businesses before, they clearly had due diligence performed on the business, if they didn't know what the debt position was of the business before they bought it then they are not fit to be running a hot dog stand let alone a PLC or a football club!

 

Didn't he do the deal to buy the club overnight or something?

 

Not a chance, have you seen Mort's CV?  The guy is a top class M&A advisor, there is absolutely no way he would have advised Ashely to spend £133m without getting access to the books and being able to ascertain the debt position of the business.

 

Given that it was an all cash deal, there wouldn't have been the pressure from a bank to get DD done but it would be truly amazing if he hadn't ascertained what the enterprise value of the business was before purchasing it.

 

Totally agree, the club was a PLC for heavens sake, there could be nothing "hidden" that wasn't in the accounts and therefore available for Ashley's team to see before he swooped.

 

The strategic review is probably more about restructuring debt etc. rather than discovering more invisible debt.

 

Indeed, I was chatting to a contact at the incumbent bank who was working on the re-financing of the core debt of the business before Ashley took it over.  At that time, he estimated that it would free up about £30m of cash which was supposedly going to be given to the manager. This re-financing was shelved when Ashley took over and I believe the debt is going to be 'auctioned' which will take some time to beauty parade banks and may be affecting our ability to deal in the transfer market.

 

I have heard that pretty much everything is being reviewed and put out to 'tender', all of which takes time  - time we clearly don't have at the moment.