LONDON (Alliance News) - Sports Direct International PLC founder Mike Ashley on Tuesday enthusiastically said he wanted to acquire the collapsed department store retailer BHS as he was questioned by MPs over working practices at the company's Shirebrook warehouse.
Ashley defended the working practices of the sports clothing and equipment retailer before the Business, Innovation & Skills committee, but suggested the FTSE 250 company may have outgrown his own ability to manage it.
Having answered a wide range of questions during a hearing which lasted around two hours, at the close of the session Ashley said he "100%" wanted to acquire BHS, the department store retailer which collapsed into administration last week with the loss of 11,000 jobs.
Despite an advisor sitting next to him telling him to not answer the question, Ashley said the combination of Sports Direct and BHS would have been a success and a "logical fit", and he would unquestionably have liked to have acquired the business but couldn't agree a price.
Ashley was answering questions posed by the parliamentary committee following press reports late last year which criticised the working practices at the Sports Direct's Shirebrook warehouse.
Reporting by The Guardian newspaper and the BBC both found working conditions at the Shirebrook warehouse in Derbyshire to be poor, with workers too scared to take days off sick as the company would dock pay.
Ashley has led a review of working practices at the company himself and has conceded changes need to be made. In a letter published on Monday ahead of Ashley's appearance, he said he had "identified a need for improvements to our security procedures at Shirebrook" and said these have now been carried out.
That letter also said Sports Direct Chief Executive Dave Forsey will not take up his four-year share bonus, which would have been worth around GBP4.0 million.
Before the committee, Ashley said the review into practices at Shirebrook was "ongoing", adding some of the issues discovered in the company's internal probe were an "unpleasant surprise". He added late in the hearing that he would be open to an independent probe into issues raised, but said he wanted to lead the probe himself to begin with.
However, he said Sports Direct, which he founded in 1982, has "probably" outgrown his ability to manage it, adding it was "impossible" to get everything right and he was "one human being". In particular, Ashley said the growth of e-commerce had not been envisioned a decade ago, and it was an extremely "labour-intensive" part of the business. The Shirebrook facility fulfills online orders.
Ashley, describing the growth of the business, said: "You go to sleep on a dinghy and wake up on an oil tanker." One of the MPs on the committee then questioned Ashley whether if that was his view, "shouldn't you get someone who can drive that oil tanker".
Ashley also agreed too many of Sports Direct's workers are on zero-hours contracts, another criticism frequently levelled at the company and one on which the MPs on the committee focused during the hearing, pushing Ashley to explain the use of agency workers over direct employees. But he said, given the growth of the business, it would not be possible to take on all employees directly.
He said it was "unacceptable" the company would dock workers 15 minutes' pay if they were one minute late for their shift, one of the concerns which had been cited in The Guardian's investigation. Ashley added he "did not know" who implemented the 15-minute rule or when it was implemented.
However, he suggested The Guardian's report of orders being barked out to employees over a tannoy system was a "myth". He added the large number of ambulance call-outs to Shirebrook, reported by the BBC, seemed very high and said it is "impossible" so many incidents occurred at the site.
He added the six-strikes-and-out policy also reported by The Guardian, by which workers can only contravene a set of rules laid out by the company six times before being sacked, was okay if implemented in the correct way.
He also acknowledged some workers were paid below minimum wage "at some point" but said he "hopes" this was addressed by the pay rise the company announced at the end of 2015.
After facing criticism from Luke Primarolo, representing union Unite at the hearing, Ashley said he can do a "better job" for the staff than Unite can. He suggested Unite has to represent workers under an "umbrella", whereas Sports Direct can look after its workers in a more focused way.
Sports Direct shares were up 3.1% to 375.00 pence Tuesday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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