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Wednesday 24 Sep 2014

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Inside Out lifts the lid on Mike Ashley's Sports Direct Empire

BBC Inside Out North East and Cumbria – Sunday 31 January, 10.25pm, BBC One – takes a look at Sports Direct, the company that made controversial Newcastle United Football Club owner Mike Ashley his fortune – and discovers workers paid around a pound a day for a 12-hour shift making clothes to be sold in his stores.

Sports Direct, which raised a reported £2.2 billion when it was floated in 2007, commissions many of its own-branded goods from third-party manufacturers in South East Asia via agents. These brands include: Donnay, Slazenger, Lonsdale, Karrimor and Everlast. As Inside Out presenter Chris Jackson discovers, many of these garments come at a high personal cost to the workers who make them, yet at a high profit margin to Ashley.

In Bangkok, Chris discovers that KH Textiles, a major supplier to Sports Direct, was recently raided by police who discovered 162 illegal workers from Laos and Burma.

Local migrant worker rights campaigner Jackie Pollack tells Chris that migrant workers are badly paid and exploited.

She says: "Basically their whole life is about work and so they have to get up very early and work very long hours and do overtime for a very minimal amount of money – and because they are working and living in the same place they don’t get days off."

This is in sharp contrast to Sports Direct's website that makes claims of "corporate social responsibility" stating that it sources its merchandise from manufacturers who can show that they uphold "ethical employment and trading practices". It says the company has a code of ethics that it requires every supplier to adhere to.

In Laos, Chris goes undercover to a factory that makes the Lonsdale brand and discovers a building packed with rows and rows of workers. Only one part of the building is air-conditioned, which according to the factory's manager, is to keep the machinery cool. The factory manager tells Chris that the workers' conditions do not meet the SA8000 benchmark and to do so he would have to upgrade the factory and pay his workers better wages.

Chris also discovers the huge profit margins Sports Direct enjoys by sourcing goods from the factory. He is shown a Lonsdale sweatshirt and is told that excluding the cost of material and transport it costs around 25p to make but retails for £13.00. Price tags are already attached to many of the samples that Chris is shown together with a 70% discount tag even before it leaves the factory.

A worker tells how she shares a factory dormitory with 38 other women, all of whom have to share one toilet. Her working day begins at 8.00am and she leaves at 8.00pm – a 12-hour day. In return, she earns 50 Baht (about £1) a day.

She says that work-related injuries are often only dealt with by taking painkillers. If a worker has to go to hospital because of an injury, he or she must pay the medical costs themselves. Employees have their wages docked for being off work and are fined a week's wages if they don't give a reason for their absence.

These revelations come at a time when detectives from the Serious Fraud Office are investigating allegations of fraud and price fixing in the sportswear industry. Officers from the SFO visited Sports Direct Headquarters in September.

Last year Mike Ashley controversially renamed the club's grounds James' Park Stadium.

However, Doug Miller, Northumbria University's Chair of Ethical Fashion, and a Newcastle United fan, says: "If we're going to have a brand name in front of it then you want that brand to be a clean brand."

Inside Out requested to speak to Mike Ashley but this was declined. His spokesman said that Inside Out had made a number of claims and statements that were both inaccurate and misleading. He went on to say that neither Newcastle United nor Sports Direct will be making any comment but will be watching the programme closely.

Notes to Editors

Please credit: Mike Ashley Uncovered: An Inside Out Special, North East & Cumbria, BBC One, Sunday, 31 January, 10.25pm.

Inside Out can also be viewed on BBC iPlayer and satellite viewers can watch on channel 975.


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