Ashley gets yellow card

Oct 1 2007 by Andrew Mernin, The Journal

NEWCASTLE United owner Mike Ashley is under pressure from one of his biggest suppliers to tidy up his stores, it was reported yesterday.

The Sports Direct founder has been told by German sports company Adidas to declutter his sportswear stores to prevent dragging the brand downmarket.

Adidas chief executive Herbert Hainer said: “We are working with retailers to upgrade stores. It is something that will happen to Sports Direct. Mike has realised that he needs better presentation to attract customers.

Mr Ashley’s sportswear empire, which has annual sales of more than £1bn, sells heavily discounted third-party brands such as Adidas and Puma while selling his own labels, including Slazenger and Donnay, at far higher profit margins.

This strategy has attracted criticism from City analysts for the low standards of in-store merchandising that result from it.

Last July, Mr Ashley bought a 1% share in Adidas for £48m weeks after he had made a reported £40m profit by selling a 3% stake in the sports brand.

Last month, the sportswear tycoon expanded his empire by snapping up struggling Scottish retailer Nevisport.