Underperformance of Sportsdirect
Sportsdirect has gone through underperformance in recent years. It had a massive tax bill. The Company had a 674 million Euros tax bill from the authorities of Belgium in an audit done in 2018. Also, the Company had strained relationships with other key sports brands like Adidas, the Sportsdirect chain stores were underperforming, and this was a big concern to the analysts. The non- executive chair, David Daly, admitted during the annual report that the brand relationships with some other third-party brands were a bit challenging. He said that they were trying to work out with the brands so that they can have a mutually beneficial outcome.
The underperformance of Sportsdirect has negative impacts on the business. First, it will send away the shareholders, as no one wants to be a shareholder of an underperforming company. Secondly, it will lower the profits for the Company, and this is not good for any business since the aim of marketing is making profits. Moreover, the employees might not want to come and work in the Company, and the ones who are there might leave. The effects of underperformance in Sportsdirect are tremendous and cannot be underestimated; hence, the Company is striving to stay on top.