Sports Direct founder blames online shopping for warehouse problems
08/06/2016
Mike Ashley, the founder of Sports Direct, said his organisation’s workforce had to grow steeply when consumers began to place large numbers of small-volume orders over the internet. In particular, the numbers of people working at the company’s biggest distribution centre at Shirebrook, near Mansfield in England, increased quickly. The site now employs more than 3,000 people, all but 200 of them hired from employment agencies.
This policy of using agency employees has attracted widespread criticism. Trade union organisations and undercover journalists said at the end of 2015 that workers had to wait in a line at the end of the working day to go through a security search before leaving the premises because Sports Direct is concerned about employee theft. Sports Direct distributes footwear, clothing and equipment on behalf of most major sports brands and itself owns a number of brands (including Lonsdale, Slazenger, Dunlop and Everlast). Delays meant people were often unable to leave on time but received no pay for the extra time they were on site.
Politicians in the UK have taken note and, on June 7, Mr Ashley was asked to give evidence to a parliamentary committee. Questioned on this matter by members of parliament, he said he accepted that on the specific point of people having to wait in a queue, unpaid, to go through security and “for that specific time” workers were being paid below the legal minimum wage. He said the company had addressed this problem, and other criticisms since the end of 2015. He explained that the security area through which workers leave the distribution centre is “now ten times the size, and hundreds of people can walk through per minute”.
Asked by the politicians why his company, which reported turnover of almost £3 billion in 2015, hires fewer people directly than from agencies, he said the rise of internet shopping was the main reason. Mr Ashley explained: “It would have been impossible for us to grow as we have grown over the last 10 years and have taken all those people on ourselves. We could not have done it; it would have been physically impossible. No one could have predicted that internet growth; it came out of nowhere and it requires ten times the people that [traditional] retail does.”
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