Sports Direct chairman Keith Hellawell survives shareholder protest, as 47% of independent investors vote to oust him

Sports Direct’s chairman Keith Hellawell has narrowly survived a tense shareholder meeting after a majority of independent investors voted in favour of his re-election.
After heightened speculation that he would be toppled, polling results reveal that 53.3pc of independent shareholders voted to re-elect the former police chief and drugs tsar, while 46.7pc voted against him.
Including founder and majority shareholder Mike Ashley’s 62pc stake, Mr Hellawell had a backing from 87.5pc of investors.
The chairman has escaped being ousted by rebelling investors, despite his promise to step down if a majority of shareholders voted against him again.
A string of independent shareholders including Aberdeen Standard Investments, Royal London, Hermes, Fidelity and Legal & General are expected to vote against Mr Hellawell while advisory groups Glass Lewis, Pirc and ISS recommended investors revolt against him after presiding over a long history of corporate governance breaches.
However, the power of minority investors was weakened after Standard Life sold down its 10pc stake earlier this year. Phoenix Asset Management, which holds 8pc in Sports Direct had said that it would vote in favour of the chairman. Mr Hellawell refused to answer questions about his future.
Sports Direct’s under fire chairman said at the company’s meeting in Shirebrook that there is no need for an “outside body” to review working conditions at the retailer as he faced the uncomfortable vote that could end his seven-year tenure at the company.
Sports Direct chairman Keith Hellawell survives shareholder protest, as 47% of independent investors vote to oust him

An employee pulls a trolley past storage racks in Sports Direct warehouse
Mr Hellawell fended off a series of shareholder questions at the company’s annual meeting at Shirebrook about how its treatment of employees had improved since a scandal-ridden 2016 when it emerged the company was underpaying its warehouse workers.
Mr Hellawell said that he was “sick and tired of reports” that suggested the company didn't pay sick or holiday pay and trumpeted Sports Direct’s status as a UK employer and taxpayer.
He reasoned that it was not shifting more zero-hour staff to permanent contracts because workers preferred the flexibility. Mr Hellawell said that for as long as zero-hours remained a legal form of employment, the company would consider it.
Worker representative Alex Balacki, who joined Sports Direct’s board in April, making the company one of the first to introduce employee representatives, said that his tour of shops revealed that the majority of workers preferred zero-hours.
However, the vast majority of workers at Shirebrook’s warehouse, which is staffed by agencies, do not have the ability to feed into Mr Balacki’s surveys.
A Sports Direct spokesman said there was a separate “listening group” for Shirebrook workers, although unions have claimed that those surveys breach staff anonymity.
Sports Direct share price
Mr Hellawell said that Sports Direct wanted to “foster good relations [with the trade unions] but we don't think that's always reciprocated”.
The chairman revealed that an “ongoing review on corporate governance” had listed five concerns and the business had addressed one of them, but he failed to elaborate on what those concerns were or how they had addressed the problem so far.
Earlier, Sports Direct attempted to soothe the City ahead of a rebellion against Mr Hellawell by revealing that it has an optimistic outlook for its “Selfridges of sport” strategy.
The strategy, unveiled last year, has been the brainchild of Sports Direct majority shareholder and chief executive Mike Ashley, who two weeks ago announced he would not be attending the once-a-year meeting because he was too busy.
His attempt to turn Sports Direct into a version of the upmarket department store comes after the sportswear retailer has suffered from its poor relationship with brands like Nike and Adidas after years of its “pile it high, sell it cheap” strategy.
Sports Direct chairman Keith Hellawell survives shareholder protest, as 47% of independent investors vote to oust him

Mike Ashley
As a result of not stocking the latest ranges of trainers and leggings, Sports Direct has missed cashing in on the lucrative athleisure trend which has fuelled growth at archrival JD Sports. Mr Ashley’s move to snatch back sales has led to the pugnacious founder driving a number of new “flagship” shop openings which stock more premium ranges of sports brands in the hope of lifting sales.
The company has also recently taken full ownership of upmarket retail chain Flannels, which sells ?815 Gucci dresses and ?1,260 Valentino handbags. Sports Direct said that despite no longer being a director, Flannels founder Neil Prosser remained an integral part to Sports Direct’s “premium lifestyle division”.
But despite repeated requests, the company will not confirm who is now in charge of running the Flannels business which is now a core part of the listed business. Sports Direct last year spent ?108m on a Flannels flagship store on Oxford Street in a property deal arranged by Michael Murray, the partner of Mr Ashley’s daughter Anna.
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Sports Direct said that its “new generation” of stores were exceeding expectations and the retailer was optimistic of growing underlying earnings by between 5pc and 15pc next year.
The company raised its earnings guidance at full year results in July after nursing a 60pc slump in annual profits after being wrong-footed by the sharp fall in sterling following the EU Referendum.
Mr Ashley said: “We remain fully focussed on our strategic goal of moving our core business towards the ‘Selfridges’ of sport in order to further strengthen our proposition and drive long-term profitability.”
“We will continue to build on the positive progress that we have made over the last 12 months, which we have outlined during a very constructive meeting with stakeholders in July.”
Analysts at Liberum said they would wait for the arrival of Jon Kempster, Sports Direct’s first permanent chief financial officer in over three years, before re-appraising its “hold” rating on the stock.
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