Jim Armitage: Dave Forsey's exit a result but Ashley still needs to up his gameComments Off on Jim Armitage: Dave Forsey's exit a result but Ashley still needs to up his game
Dave Forsey has had a lot on his plate lately. Just ask viewers of The Real Housewives of Cheshire.
Why, only last month his mansion’s lawn was ruined by the pink Hummer he hired for his daughter’s primary school graduation. As his sparkling wife Stacey grimaced: “Dave won’t be happy with that.”
Little wonder he’s decided he needs to spend more time with his family.
The result, at first view, is yet another corporate governance catastrophe: Mike Ashley, the founder who repeatedly declares his sprawling Sports Direct empire has got too big for him to handle alone, has lost his top executive and is taking even more responsibility on his shoulders.
Not only that but the City has lost the one person at Sports Direct who actually bothered to try to communicate with it. And the guy they were really gunning for — chairman Keith Hellawell — has kept his job.
But the latest moves are far more positive than they first seem.
Despite his humble former title of “executive deputy chairman”, we all know Ashley has been running the company like a chief executive anyway. So taking on the role officially ends the absurdity of Forsey’s position.
As CEO, Ashley is now directly answerable to investors; no longer can he hide behind Forsey in meetings with shareholders. Those conversations may be spiky but at least they’ll be informative.
The promotion of Karen Byers — the woman Ashley has said “runs Sports Direct” — is also an improvement. It gives her higher profile and a louder voice in his ear.
I’d prefer it if she was made a main board director, and so more easily held to account, particularly for the company’s poor working conditions. (My guess is she is paid a fortune and doesn’t want the world knowing it through the director’s remuneration report.)
But these moves are all steps in the right direction. And, by the way, I wouldn’t bet on Hellawell sticking around for long. The next job is a harder one: get the stores trading better.
Key to that is obtaining better product from the big brands. But Adidas and Nike won’t send Ashley their hot new ranges if the stuff will just be displayed in boxes behind the six-packs of socks.
Either sales displays must be improved in the current stores or more upmarket outlets must be launched.
In short, if Ashley’s going to benefit from the sports-fashion boom that’s sent JD into the stratosphere, he needs advice on how to make Sports Direct a place trendy, wealthier types want to frequent.
He says he hopes to work with his old “right arm” Dave Forsey again. But perhaps it’s Stacey he should be calling.