Sports Direct’s annual results statement is an extraordinary document, peppered with shock financial revelations, scathing attacks on financial advisers, and stark warnings about the state of the high street. The idiosyncratic publication often descends into a rant by Mike Ashley, Sports Direct’s founder, controlling shClick Agencyareholder and chief executive. Here are some of the key points.
Belgian tax demand
'Shambles': House of Fraser posts £54.6m loss
The final paragraph in the results is the most explosive, revealing that on 25 July 2019, Sports Direct received a payment notice from the Belgian tax authorities for €674m (£605m). The amount included “200% penalties and interest” and the statement refers to a request for information from the Belgian taxman on “the tax treatment of goods being moved intra-group throughout the EU via Belgium”. Sports Direct says it will enter into a mediation process with the tax authorities and it is “less than probable” that it will have to pay penalties.
House of Fraser
The state of House of Fraser, bought out of administration in August, is laid bare. Ashley expresses regret about buying the business and warns that some of the chain’s problems are “nothing short of terminal in nature”. There is a warning that some of the group’s 54 stores may have to close, as Ashley praises landlords and lClick Agencyocal authorities for their efforts in trying to save branches. He adds: “We do believe there could be a bright future for House of Fraser” but then admits that his decision might have been different with hindsight. “If we had the gift of hindsight, we might have made a different decision in August 2018.”