Mike Ashley took the witness stand at the High Court today to give evidence in a case brought by a former employee who is suing him for £15m.
It was a chance to hear about the business practices of one of Britain’s most unusual self-made men, who built Sports Direct from a single shop into a multi-billion pound business.
Jeffrey Blue, the investment banker who is suing Mr Ashley, claims that he promised to pay a £15m bonus if the share price doubled to £8. This deal was allegedly struck during a boozy night at the Horse and Groom pub in London.
Mr Ashley cut a combative figure in the witness stand, frequently getting angry, and more than once accusing Mr Blue of being a liar.
But in addition to the hard-drinking culture described in Mr Blue’s evidence, we got some fascinating insights into how Mr Ashley does business.
He is not a fan of Shirebrook
The Derbyshire village of Shirebrook is home to Sports Direct’s vast warehouse, the scene of many allegations of exploitative working practices in the past. It’s also the location of a vast office complex, arranged, Mr Blue claimed, around Mike Ashley’s desk.
Mr Blue claimed that Mr Ashley had convened a “senior management meeting” in a pub, the Green Dragon, at the nearby village of Alfreton, which involved heavy drinking. It was at this pub that Mr Ashley allegedly drank twelve pints and vomited into the fireplace.
But Mr Ashley claimed that this was not a pub they usually attended.
“How many pubs was Sports Direct holding senior management meetings in?” asked Jeffrey Chapman QC, Mr Blue’s lawyer. But Mr Ashley denied they were management meetings, with agendas and minutes.
“It is very boring and lonely in Shirebrook,” Mr Ashley said. “You know what we do after work? We go to the pub after work.”
He is not good with phones
When asked to explain why the court had not been able to get hold of copies of his text messages at the time, Mr Ashley explained that he was not good at looking after phones.
“I did not have a mobile phone in my personal possession,” he said.
“What has happened to your mobile phones during that period?” Mr Blue’s QC asked.
“I periodically lose my phone, destroy my phone, damage my phone… Whatever happens to phones happens to my phone.” And whenever one phone is out of action, he asks Sports Direct to give him another one.
At one time he said he had a box of about 50 phones in his office, though that number is now down to about 20.
He didn’t think the Sports Direct stock market float was a success
“The IPO was an unmitigated disaster,” he told the court.
The 2007 stock market debut, which saw Mr Ashley raise over £900m, happened because it was the best thing for the business, he said. It wasn’t necessary for him to sell shares to raise money.
“I was already fabulously wealthy. What do you think I did with the money? Went out and bought the neighbour’s house? I already owned it!”
The shares fell from £3 to less than 35p following the company’s stock market launch, as investors became worried about Mr Ashley’s unconventional management practices – including the time he played a game of “spoof” with the investment bankers who had organised the float.
He doesn’t regret the game of spoof
One of the many times Mr Ashley became extremely animated in court was when asked to describe the moment when he played spoof with an investment banker to settle a dispute over £750,000 of legal fees connected with Sports Direct’s flotation. Spoof is a game of chance popular in City circles.
“I had the opportunity to save Sports Direct £750,000!” he said. “I either had to pay or I could spoof for it.”
However, Mr Ashley lost the hand of spoof – and the fees were paid in full.
“Yes the City may laugh at me for the next 15 years, but yes – I would do it again in the morning!” he said.
He doesn’t enjoy school events
In his written statement, Mr Ashley called the fateful meeting at the Horse and Groom pub a “fun night”. So much fun that the party went on to another venue, which he said he was too drunk to remember.
But in his oral evidence, he seemed less enthusiastic. “I would rather have had needles in my eyes than go to that meeting,” he said.
The meeting was convened to build relationships with investment bankers who were going to act for Sports Direct – and he had been invited along to impress the company’s future brokers. It was “like going to a school ‘do’ with your kids – absolutely horrendous”.
Other witnesses in the case who have worked for Mr Ashley spoke about his talents in reverential tones. But Mr Ashley himself was much more self-deprecating, about his reputation, his weight, and even his ability to write letters.
He said he discouraged staff from wheeling him out to charm people. He said they usually found it a letdown. They would say “Jesus, is that it? We thought we would be meeting a bright bloke!”
“The other side will not be as impressed as you think they will be,” he said.
He isn’t a Star Wars geek
Many of the questions directed at Mr Ashley referred to his level of control of the company – which, given that he owns more than half the shares, is not as complete as you might think. He denied sitting at the centre of the office “stroking a white cat” in the style of a Bond villain.
“I am not Obi Wan Kenobi controlling the Death Star, let’s be clear” he said. Obi Wan Kenobi has also denied controlling the Death Star – that was Darth Vader’s department.
The case continues.