Sports Direct staff searches criticised

Sports Direct store

Retailer Sports Direct has admitted that it searches staff leaving its warehouses, but says it has reduced the amount of time it takes.

A report in the Guardian suggested the extra, unpaid time taken for "rigorous" compulsory searches meant workers were paid less than the minimum wage.

"The process has been streamlined which has led to a reduction in waiting time," the firm said.

Shares in the FTSE 100 company closed 10.6% lower at to 594.6p.

Royal London Asset Management, which owns Sports Direct shares, said it was concerned about corporate governance at the company, which is controlled by billionaire Mike Ashley.

Ashley Hamilton Claxton, corporate governance manager at Royal London, told 5 live: "We want to see them improve their relationships with employees and to address some of the allegations that have come in front of them, if they are in fact true. That would be quite important for us as shareholders."

Ms Hamilton Claxton also had concerns about what she called Sport Direct's "unfettered ability to trade in the shares of other retailers", adding: "It's a major red flag for us. It is definitely one of the companies we have the most concern about and that is why we are speaking publicly about it."

Sports Direct said on Thursday that pre-tax profits for the six months to October rose 25% to £187m on revenues flat at £1.43bn.

Much of Sports Direct's jump in profits came from dealings in shares in other retailers, particularly the sale of five million shares in rival retailer JD Sports.

Image copyright Getty Images
Image caption Sports Direct founder Mike Ashley also owns Newcastle United

Broker Cantor Fitzgerald cut its price target on the stock by 60p to 700p, calling the results "a little behind the curve", while Exane said the results were underwhelming compared with JD Sports.

The Guardian sent undercover reporters to work at Sports Direct's warehouse in Shirebrook in Derbyshire last month. They found that it was taking 15 minutes to search staff leaving the warehouse at the end of their shifts.

Zero hours

TUC general secretary Frances O'Grady said: "All workers should be paid at least the minimum wage for every minute they are required to be on company premises.

"If the allegations against Sports Direct are found to be true, the government must make sure all their staff receive the full pay they are entitled to."

Sports Direct also disputes the Guardian's claim that more than 80% of staff at the warehouse are on zero-hours contracts.

"To be clear, no warehouse workers are on 'zero-hour' contracts, all have contracted hours with the agencies," the retailer's chairman, Keith Hellawell, said in the results statement.

"In retail, casual workers find the flexibility offered by these arrangements very useful. We comply fully with all applicable legal requirements and will continue to keep these under review."

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