UK retailer Sports Direct has lowered its profit forecast as it seeks to arrest a plummeting share price. But with quarterly revenue at Nike disappointing investors, is the sportswear industry facing a workout? Ivor Bennett reports
Mike Ashley is not a man who likes to play by the rules. The Sports Direct owner could be in contempt of parliament for refusing to face MPs' questions. Even calling them a joke for wanting to quiz him on his working practices. But on top of that now is the fallout from a recent interview. Shares in britain's biggest sportswear retailer sliding 10 percent on Tuesday, with the company forced to confirm a lower earnings forecast, after Ashley revealed a trading slowdown which he blamed on negative publicity. (SOUNDBITE) (English) WORLD FIRST, CHIEF ECONOMIST, JEREMY COOK, SAYING: "I think this is more about the actual offering of Sports Direct stores. You walk into a Sports Direct store, a lot of the onus has been put on their own-brand stuff as opposed to going in there and buying a Nike t-shirt or an Adidas pair of trainers, for example." But Nike are also not seeing as many customers as they'd like. The world's largest footwear maker reporting lower-than-expected quarterly revenue. A strong dollar hitting sales in emerging markets by as much as 8 percent. (SOUNDBITE) (English) WORLD FIRST, CHIEF ECONOMIST, JEREMY COOK, SAYING: "The Chinese market still doing very, very well. But maybe it's a case of we maybe need to see some increased R&D within the Nike product offering, or simply margins start to be cut because the profitability in that sector just isn't there if you're Nike at the moment." The sportswear giant still expects growth in the high single-digits. But investors want more. Shares falling 6 percent in extended trading on Tuesday While Sports Direct stock sunk a further 5 percent on the earnings forecast. Its shares down 60 percent in the last two years.