Retailer JD Sports Fashion has unveiled plans to overhaul its corporate governance and internal controls as it looks to “draw a line in the sand” after the departure of its long-term boss and a string of competition probes.
The sportswear group said a numbers of independent investigations into “certain matters” and a governance review had stressed the need to bolster its board and improve the way the business is run.
Helen Ashton, interim chairwoman of JD Sports, said the group had now drawn up an 18-month plan to “rebase the governance, risk and control environment” at the group.
It follows the controversial exit of executive chairman Peter Cowgill last month after 18 years in the role, just three months after JD Sports was fined £4.3 million by the competition watchdog for exchanging information with Footasylum, which it had agreed to buy at the time for £90 million.
The deal had been blocked by the watchdog a few months earlier but not before Mr Cowgill had met his counterpart at Footasylum in a Bury car park, according to video seen by the Sunday Times.
JD said last month that Mr Cowgill was stepping down after the governance review, but it is widely speculated that he was ousted amid disagreements over the planned changes at the top, with JD in the throes of splitting the chairman and chief executive role.
Ms Ashton, interim chairwoman of JD Sports, told the PA news agency: “We feel we have drawn a line in the sand and understand where we are.
“We have drawn up a very clear plan of action and have 18 months to get there.”
She added that the group’s new board line up is focused on ensuring JD Sports puts damaging competition probes and fines behind it.
Just weeks ago, the CMA said it provisionally found that JD Sports conspired, together with sporting goods firm Elite Sports and Rangers Football Club, to fix prices of Rangers club clothing merchandise.
“That’s not what we expect as a board of a FTSE 100 business,” she said.
But she added: “We want to be really careful and not lose the JD magic as we build out that governance structure.”
Despite the recent scandals, JD Sports’ much-delayed full year figures published on Wednesday showed it made a record £947.2 million annual profit haul – more than double the £421.3 million seen the previous year.
Statutory pre-tax profits jumped to £654.7 million in the year to January 29 from £324 million the previous year as demand for sportswear showed no sign of slowing.
But JD Sports – which markets itself as the King of Trainers – cautioned that underlying profits are set to remain flat in the current financial year due to the cost-of-living crisis and wider economic uncertainty.
Ms Ashton said: “Whilst we are encouraged by the resilient nature of the consumer demand in the current year to date, we remain conscious of the headwinds that prevail at this time.”
She said the search for a new chief executive was continuing, with a “number of high-calibre candidates at different stages of consideration”.
Some last minute contenders had come forward since the departure of Mr Cowgill, she revealed.
Board member Kath Smith, who has worked for Adidas and Reebok in the past, has taken the helm while the company looks for a new chief executive.
The company’s hunt for a new non-executive chairman is also “progressing at pace”, the group said.
The group added that it has repaid the £24.4 million furlough scheme support which its UK businesses received during the year to January 29, but that it would not be repaying the total £61 million received throughout the pandemic.
Source Link JD Sports pledges governance overhaul in wake of Cowgill’s departure