Jul 29, 2019
Sports Direct slides on tax revelations, weakness in core business
Sports Direct shares dropped on Monday after the retailer disclosed last week it faces a last-minute €674m Belgian tax bill at the end of a hectic day that deepened concerns over the retailer's corporate governance. In addition to the tax bill, the annual results pointed to "Serious problems at the core" of Sports Direct, said Jonathan Pritchard, analyst at Peel Hunt. Struggles in the sport division come as analysts were already deeply concerned over the fate of Sports Direct's acquisition of embattled department store House of Fraser. "It wasn't a shocker of a year in some numeric respects, and the revelation that House of Fraser was a mistake was obviously in the post, but the home truths about the core Sports Direct business were pretty shocking and management seems to be out of ideas," said Mr Pritchard. Sports Direct's shares fell as much as 28 per cent just after the open of trade in London, but trimmed the decline to 11 per cent.
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