Issues and Reports Surrounding Sports Direct UK
Sports Direct UK faces criticisms over employment practices, including zero-hour contracts, strict strike rules, health and safety risks, and loss of holidays. Reports suggest potential for European market success but discount for governance concerns. Keith Hellawell's controversial elections and fund managers' split on his position add to the company's challenges.
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TUSO activity on Sports Direct TUC Trustee Conference Janet Williamson, Trades Union Congress
Sports Direct UK employment practices In Sports Direct s headquarters, around 300 workers are permanent employees. The rest, between 2,000 and 4,000 workers, are agency workers employed on zero hours contracts. Six strikes and you re out rule - strikes include absence through sickness, excessive toilet breaks and excessive chatting with no recourse to dispute or overturn the strike. Health and safety risks (highlighted in BBC inside out on Oct 5th) - 79 ambulance call outs in 2 year period. Workers have to wait to be searched before they can leave the building, which can take between 25 and 45mins. Workers are not paid for this time. Workers lose breaks because of the time taken to walk to rest areas. Workers are banned from taking holidays in most of the school holidays.
Morgan Stanley report on Sports Direct 2015 We believe that Sports Direct has the potential to replicate its UK success in many (though not all) European markets. Even after discounting our valuation by 20% to reflect corporate governance issues, we think the shares are attractive and initiate with an Overweight rating Moreover, in focussing on governance, we think it important not to lose sight of the fact that the company s EPS [earnings per share] have more than tripled in [8 years].
Fund manager voting on Keith Hellawell 2015 Supported election of Hellawell: Fidelity, Goldman Sachs, Henderson, State Street Opposed election of Hellawell: Aviva, Legal &General, Royal London, Standard Life Abstained: Aberdeen, AXA, Hermes, Norges Bank
