Image: Wikimedia Image: Wikimedia

Sports Direct chairman Keith Hellawell has criticised MPs, trade unions and the media for waging against the company, as reports of a 57% drop in first-half profits are announced.

Mr. Hellawell, who has received criticism himself, used the results announcement to slam critics and the way the company has been treated over the last year.

He said: "I have no doubt that the extreme political, union and media campaign waged against this company has not only damaged its reputation and influenced our customers, it has impacted negatively on the morale of our people.

"I begin to question whether this intense scrutiny is all ethically motivated. One of the most damaging consequences has been for the very people our critics supposedly support."

The attack comes as the retailer reported the company’s profit before tax dropped to £71.6 million for £166.4 million in the six months to 23 October.

Mike Ashley, chief executive of Sports Direct International plc said the last six months had been “tough” for the people and performance of the company.

He said: “Our UK Sports Retail business continues to be the engine of Sports Direct, but our results have been affected by the significant deterioration in exchange rates, and our assessment of our risk relating to our stock levels and European stores performance.

“We continue to elevate our sports retail proposition for our key third party brand partners and customers, as we progress towards our medium to long term goal of becoming the "Selfridges" of sports retail. We are changing our retail channels for customers in the UK, and we will be changing our approach to our customers in Europe, which will take time.”

Last year, MPs accused the retailer of operating its warehouse like Victorian workhouse where staff are not treated like humans. Since then, Sports Direct have been forces to pay back £1 million to staff after it was found workers were being paid less than the minimum wage.

Mr. Ashley said in a statement: “What matters most to me is how tough the last year has been for the people who work at Sports Direct. Our people have once again found themselves in the spotlight through no fault of their own, yet they remain hardworking and loyal. It is for this reason that my immediate priority will be to protect the people at Sports Direct.

“Part of this includes the Company's commitment to underwrite the value of the share awards relating to the 2011 Share Scheme that are vesting in September 2017, to reduce the impact of recent volatility on the financial outcomes for our people."

Guglielmo Meardi, of Warwick Business School, is a Professor of Industrial Relations & Director of the Industrial Relations Research Unit said: "The fact that Sports Direct has been hit so significantly by scrutiny on their working practices shows that the emerging tactic of combining union and consumer campaigns on highly visible brands can really bite.

"This may negatively affect employment in companies at the receiving end of campaigns, but it should have an aggregate positive effect on shifting profits and jobs towards better employers, on improving working conditions across the sector, and on channelling competition towards quality and service rather than price, which is essential if the UK economy wants to grow out of a low-wage, low-skill equilibrium.

"The main limitation of these campaigns is rather that they are effective on highly visible consumer brands, but much less so in other sectors or in other segments of the supply chains, which are not directly in contact with, or even known by, end consumers.

"So for instance retailers forced to pay their employees the minimum wage could try to restore their productivity by shifting the pressure on the Asian producers of their garments."

He added: “Campaigns should not stop at boycotts or occasional ‘blame and shame’ but need to be integrated in more comprehensive efforts of monitoring and enforcement along the whole supply chain, as attempted for instance by the international ‘Accord’ on garment production in Bangladesh after the Rana Plaza tragedy."