Sports Direct pays a company owned by the brother of the retailer’s majority owner, Mike Ashley, to deliver online purchases to customers outside the UK.
Britain’s biggest sportswear chain has not disclosed the arrangement with Barlin Delivery Limited in its annual accounts. Barlin, which was incorporated in February 2015, is owned by John Ashley. Its registered address is a detached house in a cul-de-sac in the Lincolnshire seaside town of Cleethorpes.
Sports Direct’s website says it only delivers to the UK but that Barlin may provide international delivery to online purchasers. Barlin’s terms and conditions say it uses DHL to deliver goods.
Online orders from overseas customers make up about 6% of Sports Direct’s £2.9bn annual revenue and Barlin makes about £300,000 a year from the arrangement, the company told the Financial Times, which reported Barlin’s work for Sports Direct (£).
Sports Direct told the FT its auditors, Grant Thornton, had decided the company did not need to disclose its arrangement with Barlin despite the business being owned by the brother of its founder and executive deputy chairman. John Ashley, a computer science graduate, built Sports Direct’s IT systems from scratch after joining his brother’s business in 1989.
With the company’s annual general meeting coming up on 7 September, the contract with Barlin may add to shareholder unease about how Ashley runs Sports Direct. Ashley has put his daughter’s boyfriend in charge of the firm’s property team despite his lack of experience in commercial property.
Sports Direct chose to have an outside company manage its overseas orders because of the complexity and certain risks involved, the company told the FT. Barlin provided “valuable arms-length services” and the arrangement added to Sports Direct’s revenues rather than diverting them, it said.
Sports Direct is facing a potential investor revolt at the AGM after the Guardian revealed poor working conditions at its Shirebrook warehouse, which MPs compared to those at a Victorian workhouse. Ashley has conducted a review of how the company treats its staff but a trade union resolution calling for an independent inquiry is likely to garner substantial shareholder support.
Sports Direct was not immediately available for comment.
