Sports Direct chief quits

"I feel like I have lost my right arm," is how Sports Direct founder Mike Ashley describes the resignation of chief executive Dave Forsey.

Controversial billionaire Ashley will take back the reins at the high street sports chain nine years after handing Forsey responsibility for day-to-day running of the business, and just weeks after it warned of another big fall in profits.

Sports Direct shares surged as much as 8% Friday as it was confirmed that Ashley's wingman handed in his notice yesterday after 32 years at the high street sports chain. He joined two years after Ashley set it up, eventually taking the top job when Sports Direct floated in February 2007.

"I have given my entire working life to the company and in return the company has given me amazing opportunities and experiences," said Forsey in a brief statement Friday.

In response Ashley, who still owns 55% of the company, said: "I feel like I have lost my right arm, but I do hope to have the opportunity to work with Dave again in the future."

The news come just a fortnight after Ashley revealed he'd refused the resignation of chairman Keith Hellawell who, along with the entire board, is accused of being incapable of holding Ashley to account. Major shareholders, including Legal & General, regularly vote against Hellawell's reappointment.

Perhaps this time there was a better reason. Forsey is up on criminal charges, accused of breaking employment law when he shut down USC's Scottish warehouse early last year. He denies allegations that around 200 staff were offered just 15 minutes to collect their things rather than a consultation period of at least 30 days.

Adjourned earlier this year, the case will now be heard in November. That's bad PR and could put a serious spanner in the works at Sports Direct as Ashley tries to repair its tarnished image.

Sports Direct has been all over the news for all the wrong reason since a Guardian investigation last year exposed "Dickensian" working practices at his warehouse in Shirebrook.

Ashley has been on a major charm offensive recently to win round both major shareholders and politicians. And he must, given business at his retail empire is clearly suffering at the hands of high-flying rival JD Sports.

After warning of a profits shortfall this month, Freddie George, an analyst at broker Cantor Fitzgerald, slashed pre-tax profit forecasts from £290 million to just £205 million, giving earnings per share (EPS) of 26.3p.

Despite the positive reaction to Ashley's return to the CEO role, Sports Direct shares still trade down two-thirds from their April 2014 high and at their lowest since February 2012.

Ashley has also taken the opportunity to promote Karen Byers to global head of operations, and Sean Nevitt to global head of commercial.

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