Sports Direct chief Dave Forsey quits as Mike Ashley steps up to top job

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Sports Direct’s chief executive, Dave Forsey, has fallen on his sword amid the row over the firm’s governance, leaving founder Mike Ashley to take formal charge of the company.

The retailer said Forsey, who has been with the company for more than three decades, resigned yesterday and Ashley, Sports Direct’s controlling shareholder, would become chief executive with “immediate effect”.

Billionaire Ashley, who also owns Newcastle United, said today: “I feel like I have lost my right arm.”

Meanwhile, head of retail Karen Byers, once described by Ashley as the woman who “runs Sports Direct”, has been promoted to become global head of operations, while Sean Nevitt moves to global head of commercial. 

The reshuffle meets a key demand from shareholders, including Standard Life Investments, which had called for a shake-up of management after a prolonged period of poor performance, a string of corporate governance issues and widespread condemnation of “Victorian” conditions at its warehouse in Shirebrook, Derbyshire.

It is the second such concession to investors this week. On Tuesday, Sports Direct agreed to a fully independent review of the firm.

Leon Kamhi, of shareholder Hermes Investment Management, said the fund was “pleased”, adding: “The appointment of Mike Ashley… brings clarity to executive accountability,” he added.

Kamhi’s view was shared by the City and shares leapt 21.2p, or more than 7%, to 307.4p to top the FTSE 250.

Peel Hunt analyst Jonathan Pritchard said Forsey had tried hard to build bridges with the City, but after he surrendered a £3.6 million share award this year his departure was “not an enormous surprise”.

Forsey, 50, said he had given his entire working life to the business: he started off working for Ashley on the shop floor and rose to chief executive in 2007 when Sports Direct floated.

The past few years have been tougher; Sports Direct has issued a number of profit warnings and Forsey has been charged in connection with the collapse of fashion chain USC and if found guilty could be barred from holding a future directorship.

He also faced a backlash for his lavish lifestyle — revealed on reality TV show The Real Housewives Of Cheshire starring his wife Stacey — while staff were on zero-hours contracts. He lives in a £6 million mansion with a pool, jacuzzi and wine cellar and counts footballers Wayne Rooney and Peter Crouch as neighbours.

Ashley said today he hopes “to work with Dave again in the future”.

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September 23, 2016 |
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