Sports Direct International Plc (SPD) said it’s held “encouraging” talks with Adidas AG, easing tensions with the world’s second-biggest sporting-goods maker after a dispute over the availability of replica soccer jerseys.
Discussions have taken place between “very, very high up” executives at both companies, Sports Direct Chief Executive Officer Dave Forsey told journalists on a conference call today after reporting full-year earnings that beat estimates.
The companies have been at loggerheads since last year after Adidas restricted the supply of replica shirts for teams including Chelsea to Sports Direct outlets because of concern about the appearance of the retailer’s stores. Forsey declined to comment today on reports that Shirebrook, England-based Sports Direct had reported Adidas to competition authorities.
“They are really beginning to understand at the top level quite what an effort we are making in terms of the stores,” Forsey said. Sports Direct, the U.K.’s biggest sporting-goods retailer, is modernizing outlets and this year relocated its store on London’s Oxford Street to a 50,000 square-foot (4,645 square meters) site formerly occupied by HMV Group Plc.
The Oxford Street store “is a step away from the retailer’s usual jumble-sale-style store presentation,” said Greg Bromley, a retail analyst at Conlumino in London. That “will please its more demanding third-party suppliers, such as Adidas, that voiced concerns about the presentation in stores.”
Representatives for Herzogenaurach, Germany-based Adidas weren’t immediately available for comment.
Separately, Forsey declined to elaborate on the decision by Sports Direct’s billionaire founder Mike Ashley to withdraw from a widely criticized bonus plan only two weeks after the company gained approval from investors after years of trying.
“He’s made it very clear” that he would not want staff “to get the impression he’s taking any shares that they would have been awarded,” Forsey said. “That was his reasoning for not taking up the shares.”
Sports Direct has received opprobrium about its pay plans for 49-year-old Ashley, who owns a 58 percent stake in the retailer yet has never received a salary.
The proposed bonus, the potential size of which the company has declined to disclose, was supported by 60.4 percent of shareholders on July 2. It was described as “excessively generous” by the U.K. Institute of Directors at the time.
Ashley, who founded Sports Direct in 1982 and owns Premier League soccer club Newcastle United, has an estimated wealth of about $6 billion, according to the Bloomberg Billionaires Index.
Sports Direct fell 1.5 percent to 703 pence at 9:30 a.m. in London trading.
Business since the end of April has been “in line with management’s expectations,” the company said, with some strong weeks offset by England’s “disappointing” World Cup matches.
The national team was unable to provide a boost to sales of replica jerseys after failing to win a game and being eliminated in the first stage of the tournament in Brazil.
Underlying earnings before interest, tax, depreciation and amortization rose 15 percent to 331.1 million pounds ($567 million) in the year through April 27, Sports Direct said. That topped the 323.7 million-pound average analyst estimate.
To contact the reporter on this story: Gabi Thesing in London at email@example.com