Morning:
8°c
JJB Sports is insistent. The rumours circulating about its chairman — involving curious payments from Swiss bank accounts — are “highly defamatory”, “malicious” and “vicious”.
Let's agree that they are — there's no reason to doubt the honesty of Sir David Jones.
Which does raise the question of why enough people were willing to believe them sufficiently to derail a £100 million rights issue aimed at securing the future of the business.
(They finally got this deal away yesterday.)
These malicious gossips only succeeded because some people thought the allegations were plausible.
Partly this is a function of the workings of the sports-gear industry.
It is a near closed shop of wheeler-dealers who have known each other forever, who invest in each other's firms, take over each other's shops, sell each other kit to flog in supposedly rival stores and bitch like hell about everyone else involved.
Any of the players would believe anything about any of the others.
In particular, the links between JJB and Mike Ashley's Sports Direct are incestuous enough to have sparked two Competition Commission inquiries and many more personal feuds.
Earlier this year Jones suffered a very public dust-up with Ashley over a personal loan he had taken from the Newcastle United owner. Even if that isn't a conflict of interest, it looks bad.
How many scandals — real or invented — can a chairman endure before he has to accept that his position is no longer useful to the company? One more like this, and Jones has surely got to go.
He intends to step aside from leading the business soon anyway, leaving the top role to a new chief executive.
Surely this person should be an industry outsider. It might be helpful if that was someone who hasn't borrowed money from Mike Ashley, didn't used to work for JJB and has no interest in being pals with its founder Dave Whelan.
Perhaps another issue for JJB over the traumatic past few months has been that on occasions it has struggled to get its own story entirely straight.
On Friday, as JJB battled to keep the rights issue on track and prevent the rumours seeping into the papers, advisers to the company said the delay was merely because of last minute bureaucracy from the UKLA.
Yesterday, the latest statement to the stock exchange included the line:
“The Company would like to make it clear that the UK Listing Authority did not block the process as incorrectly reported in the press.”
This prompts a one-word response: unbelievable.
Tesco gives us our daily bread but it's not God yet
AN odd thing happens to powerful and successful firms after a while: the people who work for the business start to imagine that it, and perhaps they, are invincible.
This is often when those same businesses begin to decline as it signifies the point at which outsiders must be wrong for the simple reason that they are not insiders. Group-think takes hold. Critics are fools.
Twice in recent weeks Tesco has given hints of developing the disease, once demanding (demanding!) that a “balancing” quote be inserted into an already balanced story and once getting huffy about a highly flattering story on its latest successes, which didn't use the comparative numbers the supermarket would — on this occasion anyway — have preferred.
It's probably a blip. Tesco didn't become the biggest retailer in the land by being unwilling to concede that it may not have all the answers.
I'll know that the company hasn't developed a God complex when it doesn't get in touch about this piece.
