The installation of Sports Direct founder Mike Ashley as chief executive following the resignation of Dave Forsey “is unlikely to reassure anyone”, according to Royal London Asset Management.
“The structure and competence of the Sports Direct board has long been a concern to the investment community. The installation of Mike Ashley as chief executive, consolidating his influence at the top of the business, is unlikely to reassure anyone,” says RLAM head of sustainable investments Mike Fox.
“An independent review of the business, led by a new chairman and starting as soon as possible, remains the only way for Sports Direct to begin the process of rebuilding trust with investors.
“There remains no sign of this happening.”
A statement from Sports Direct issued Friday morning confirmed Forsey had resigned on Thursday and that Ashley was taking over the role with immediate effect.
“I feel like I have lost my right arm,” Ashley said in the statement, adding he hoped to work with Forsey again in future.
Forsey, who has been with the retailer for 32 years, said he had given his “entire working life” to the company.
The resignation comes the same week Sports Direct caved to investor demands for an independent review into working practices and corporate governance.
Working conditions at Sports Direct’s factories have been previously been described as akin to Victorian workhouses, while questions have been raised about the process by which the company makes contracts and appointments.
Sports Direct says Forsey has agreed to “facilitate a smooth handover of his responsibilities”.
It added that Karen Byers had been promoted to the role of global head of operations, and Sean Nevitt had been promoted to the role of global head of commercial, both with immediate effect.