Scottish MPs to quiz Ashley on USC fiasco

MIKE Ashley faces a grilling by MPs probing the collapse of one of his store chains.

The Scottish Affairs Committee has invited the billionaire to give evidence over the administration of 28 stores bearing the USC name. The failure also saw the loss of 200Ayrshire based warehouse jobs.

Retail tycoon Ashley has not replied to the formal request, but should he decline the politicians could then summon him to appear.

In a rare business setback a supplier forced the retail chain into administration over an unpaid bill. The holding company behind 28 stores bearing the USC fascia appointed accountants Duff & Phelps to manage the administration. It immediately secured a buyer for the youth-oriented fashion chain in what is known as a prepacked administration.

The deal is complex because there are 60 USC stores owned by two separate holding companies, both controlled by Ashley’s Sports Direct (down 14p to 701p) which has a stock market value of £4.3bn.

The unit containing 28 stores – called West Coast Capital USC – fell into administration, while the firm behind the remaining 32 stores was unaffected. West Coast Capital USC was trading at a loss and owed cash to Italian fashion giant Diesel, which issued a winding up order to try to recoup the debt. This triggered the administration.

But it is the added twist that Ashley’s Republic clothing chain bought USC out of administration which MPs will want to focus on.

The administrator was forced to accept the offer rather than auction the business because Ashley was able to move fast due to his knowledge of the business which meant the retailer was able to remain trading. Workers hope to take legal action because they were not given the standard 90- day consultation period.