Newspaper article The Evening Standard (London, England)

Sports Direct's Woes Mount on Profit Warning; WAR WOUNDED POOR CHRISTMAS LEAVES GAMES WORKSHOP FACING UPHILL BATTLE

Newspaper article The Evening Standard (London, England)

Sports Direct's Woes Mount on Profit Warning; WAR WOUNDED POOR CHRISTMAS LEAVES GAMES WORKSHOP FACING UPHILL BATTLE

Article excerpt

Byline: Russell Lynch

BILLIONAIRE Mike Ashley's woes deepened today as his Sports Direct sportswear empire hit the City with a shock profit warning.

Sports Direct already mired in controversy over its working practices and the appointment of his daughter's 26-year-old boyfriend as the head of the company's property division said the firm had "seen a deterioration of trading conditions on the High Street and a continuation of the unseasonal weather over the key Christmas period".

meetfit The trading blow means the company is "no longer confident" of meeting its PS420 million profit target. The firm believes the bleak conditions will continue between now and the end of its trading year in April, potentially leaving underlying profits as low as PS380 million.

This is the second time in six months that the firm has cut its profit target after lowering it from PS480 million to PS420 million last July because of a failure to make the anticipated acquisitions which would have boosted sales.

The City marked the shares down 7% or 36.25p to 475.75p on the news, delivering another personal blow to the fortune of Newcastle United owner Ashley (pictured), who still owns more than 50% of the sportswear chain he floated in 2007.

Since the beginning of December, shares in the retailer have tanked by more than a third and could be relegated from the FTSE 100. Thousands of employees are also likely to miss out on lucrative share bonuses as a result of the poor trading. Last year about 2000 Sports Direct employees each landed bonuses worth PS18,000 after meeting profit targets set out in 2011.

Sports Direct is the third retailer this week to admi the unseasonably warm autumn and winter weather had deterred shoppers from buying winter goods. Lord Wolfson's Next and rival Marks & Spencer both said the weather was partly to blame for poor Christmas trading.

tlim But Sports Direct is also wrestling with problems of its own making. …

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