Sports Direct falls from FTSE 100

After concerted campaigning from Unite and several media investigations revealing draconian working conditions at the retail giant’s Shirebrook warehouse, Sports Direct has fallen out of the FTSE 100 today (March 2).

 
A stunning £1.6bn has been wiped away from Sports Direct’s value and its share price has plummeted by 40 per cent since December.

 
At the beginning of the year, the retailer announced that profits would be ÂŁ40m less than expected.

 
As UNITElive has previously reported, an undercover Guardian investigation in December found workers being subject to a forced search after their shift lasting about 15 minutes – time for which they weren’t compensated.

 
The Guardian revelations prompted calls for the HMRC to investigate whether the retail giant may be illegally paying its workers below the minimum wage.

 
A separate BBC investigation revealed that ambulances had been called to the warehouse more than 80 times in two years, while a Channel 4 Dispatches expose spoke to workers who were constantly in fear of losing their jobs after being intimidated over a tannoy if they weren’t working fast enough.

 
Unite represents permanent workers at the retailer’s Shirebrook warehouse, where 3,000 agency staff are also employed.

 
Dignity call

Unite has called on Sports Direct to restore dignity in the workplace by directly employing agency workers supplied by Transline and the Best Connection.

 
The news that Sports Direct has fallen out of the premier 100 companies in the UK follows several demonstrations Unite has staged, notably in Glasgow and Newcastle, where a Sports Direct Shame banner was unfurled at Newcastle United and Rangers matches, which was broadcast to millions on live TV.

 
TUC general secretary Frances O’Grady said that Sports Direct’s fall from the FTSE 100 should be “a cautionary tale for companies who treat their workers badly.

 
“The reputational and financial damage Sports Direct has suffered is of its own making,” she said.
“Subjecting staff to workhouse conditions is not the way to build a successful business,” O’Grady added. “Shareholders must demand root and branch changes or Sports Direct’s name will continue to be dragged through the mud.”

 
Even the business community sharply criticised Sports Direct after the Guardian’s investigation, with the Institute of Directors calling the retailer “a scar on British business”.

 
Former shadow business secretary Chuka Ummuna had called an urgent parliamentary question in response to the allegations against Sports Direct, which forced business minister Nick Boles to address concerns in the Commons as the scandal came to light.

 
In response to today’s news that Sports Direct’s fortunes were plummeting, Ummuna said, “What this illustrates is that good business is good business and vice versa. So if you’re going to be seen to be pursuing a business model that customers do not approve of there will be an impact on how the company is viewed and valued.”

 
“Investors and customers are not only looking for good value,” he added. “Increasingly they are looking for good values in a company.”

 
Unite assistant general secretary Steve Turner said Sports Direct had become “the poster boy for bad British business with its shady corporate governance and draconian working practices.”

 
“As a result investors are turning their back on a company that brings with it a stench of abuse and malpractice,” he said.

 
Salutary warning

“Its fall from the FTSE 100 is salutary warning to boardrooms across the UK and points to deep seated problems within the retailer,” Turner added. “Sports Direct needs to heed the message being delivered by the City and fundamentally rethink its corporate governance and the way it treats its workforce.

 
“Paying lip service to reviewing employment practices and giving pitiful pay rises will not repair Sports Direct’s tarnished reputation or meet Mike Ashley’s promise of the retailer becoming a model employer.

 
“Sports Direct should be under no illusion,” Turner asserted. “Unite will not stop campaigning until justice and dignity is secured in the workplace at Sports Direct. Only through root and branch reform and by working with Unite will Sports Direct begin to repair its battered share price and regain the confidence of customers and investors alike.”