Sports Direct
Mike Ashley, founder and majority shareholder of sportwear retailer Sports Direct, will take over as chief executive with immediate effectDarren Staples/ Reuters

Sports Direct said that its chief executive has resigned and will be replaced by the troubled retailer's billionaire founder Mike Ashley.

Dave Forsey, who has worked for the business for 32 years, left the firm yesterday (23 September) without any explanation. Ashley will take over his duties "with immediate effect", the company said. Ashley had been the firm's deputy chairman.

Ashley said: "I feel like I have lost my right arm, but I do hope to have the opportunity to work with Dave again in the future."

The sports chain has been under fire from unions, shareholders and MPs over its corporate governance and working practices after it emerged that staff were being paid less than the minimum wage.

Forsey said: "I have given my entire working life to the company and in return the company has given me amazing opportunities and experiences. I wish everyone at Sports Direct well in the future."

Earlier this week the business pledged to carry out an independent review of the troubled retailer's working practices and corporate governance, following concerns raised by shareholders.

The move comes after independent shareholders rebelled at the retailer's annual meeting earlier this month, with 53% opposing the re-election of chairman Keith Hellawell. The chairman was kept in place after being backed by founder Ashley, who still owns 55% of the business.

Sports Direct has moved to address concerns about its working practises by offering casual retail staff guaranteed hours instead of zero hours contracts, and ensuring all warehouse staff are paid above the national minimum wage following an initial review by its law firm RPC.

A growing number of institutional investors want a clear-out of the existing board, and the introduction of new members with enough experience to challenge Ashley's influence across the company.

The Financial Times reported in August that a company owned by Ashley's brother is involved in distributing products sold by Sports Direct, while in January his daughter's 26-year-old boyfriend was put in charge of the group's vast property portfolio.

Joshua Raymond, market analyst at broker XTB.com, said: "It's a bit of a surprise, especially given the annual meeting has only just passed and that would have been the ideal moment to announce this."

"Nevertheless, whilst the change would have long been mooted by shareholders, the fact Mike Ashley immediately assumes the chief executive role will keep a laser focused attention on the firm's ability to recover from the crisis."

"This point is even more pertinent given much of the concern focused on Ashley's power grip on all aspects of the retailer, a grip which has just become even stronger."

The company also said that Karen Byers, its head of retail, had been promoted to global head of operations and Sean Nevitt, head of buying, had moved up to global head of commercial operations.