Jessica Fino 16 Jun 2017 02:37pm

Sports Direct drops deal with company owned by Ashley's brother

Sports Direct has reportedly scrapped its deal with the delivery company owned by Mike Ashley’s brother John Ashley

According to the Financial Times, Sports Direct has stopped working with Barlin Delivery Limited, months after the Financial Reporting Authority launched an investigation into the deal.

The FT had previously reported in August that the retailer had made hundreds of thousands of pounds in undisclosed payments to Barlin Delivery.

Barlin Delivery, which made £300,000 in profit each year from its work for Sports Direct, has no vans or drivers and subcontracts its delivery work to couriers such as DHL, the FT added.

Shareholders questioned the arrangements, which were not disclosed in Sports Direct’s accounts.

In November, the FRC opened an investigation into Grant Thornton over its audit of Sports Direct, related to the retailer’s arrangement with Barlin.

Sports Direct has faced repeated criticism in recent years for its working practices and poor corporate governance.

Sports Direct said in August that Barlin was appointed to arrange "all international deliveries, including dealing with the courier companies, with undelivered packages and returns".

"Sports Direct took professional advice at the time (and subsequently) as to the most efficient way to structure its operations so that it could satisfy the following objectives: maximise its internet sales; deliver value to its customers; [and] de-risk the distribution logistics."

The spokesperson added at the time that the company and its auditors Grant Thornton were “comfortable that there was no related party disclosure required in Sports Direct’s historic accounts”.

But the FT said a review of Sports Direct’s website shows it has since abandoned the partnership. The retailer now seems to handle its own deliveries.