Sports Direct posts fourth-quarter sales rise

LONDON, United Kingdom - British retailer Sports Direct hit out at shareholders on Wednesday for failing to back a lucrative bonus share scheme proposed for its founder Mike Ashley, as it posted a rise in fourth-quarter sales. Earlier this month, Britain's biggest sporting goods chain was forced to pull its latest proposal to award founder and majority shareholder Mike Ashley a bonus share scheme worth some 73 million pounds ($123 million) after failing to gain enough investor support.

"The board was extremely disappointed to withdraw the resolution regarding a proposed share scheme award to Mike Ashley," Sports Direct chief executive Dave Forsey said in a statement. "The most disappointing aspect was where large shareholders gave their support only to then vote differently. This outcome is likely to lead to further uncertainty in the future."

The group, which has over 600 sports stores in Europe, including 400 in the UK, said on Wednesday total sales rose 10.3 percent to 360 million pounds ($606 million) in the nine weeks to March 30, with core sports retail sales up 11 percent.

Sales in its smaller fashion arm, which trades under store names including USC and Cruise, rose 0.7 percent.

The rejection of the bonus scheme sparked an eventful few weeks for Sports Direct, as shortly afterwards Ashley, who receives no salary or other bonus from Sports Direct, announced he had cut his stake in the retailer by 4 percent to 57.7 percent, causing a wobble in the firm's share price.

At the same time, the group also surprised investors by snapping up an 11 percent stake in Britain's House of Fraser while the department store was finalising a tie-up with China's Sanpower Group.

Sports Direct, whose raft of cut price label and own-brand offerings have proved popular with British shoppers, said it was very confident of at least meeting its full-year core earnings target of 310 million pounds before staff bonus charges.

Shares in the firm, which now aims to include Ashley in a share scheme for all eligible staff and management, closed on Tuesday at 830 pence, up 89 percent on a year ago, valuing the business at almost 5 billion pounds.

($1 = 0.5944 British Pounds)