LESS than six months on from the eagerly-awaited float of Mike Ashley's Sports World empire, things are turning steadily sour for investors after more bad news from the business.

Mr Ashley netted £929m in a single day in February after selling 43 per cent of the business he founded.

But shareholders who bought at the 300p opening price have seen their stock nosedive to less than half that level.

Initial misgivings over how the business would adapt to public markets have developed into a lengthy charge sheet against the secretive billionaire entrepreneur.

Mr Ashley's Sports Direct International, which also owns Lillywhites and brands such as Dunlop alongside the Sports World chain, has been accused of poor communications and vague trading updates, turning sentiment against the business.

He hit back by calling investors `cry babies' after maiden results posted by Sports Direct were marginally lower than expected underlying earnings of £191m but warned of limited profits growth next year in tougher trading conditions.

The figures were less than predicted by house broker Merrill Lynch, which also handled the float of the business.

City analysts - already frustrated by their dealings with the company - needed little excuse to get the red pens out and mark down the stock, sending the shares plummeting by nearly a quarter.

Perception

Concerns over the firm's communications and strategy are such that the perception is growing that the company may buy back the business.

Sports Direct has moved into the market to buy back shares cheaply following the results.

Certainly Mr Ashley has been busy on the acquisition front since he netted the float cash in February, buying stakes in a range of retailers from the Finnish Wilson rackets maker, Amer Sports, to outdoor leisure chain Field & Trek, as well as launching a bid for US boxing equipment maker Everlast.

The company's stock explanation is usually that such moves are `consistent with Sports Direct's policy of pursuing strategic investment opportunities'.

But company watchers are worried about the strategy and some of the mixed messages coming out from the group.

An example is when Mr Ashley - independently of Sports Direct - bought a stake of about three per cent in German sportswear giant Adidas soon after February's float. He is said to have sold out again in June at a profit of around £40m.

Yet last week, Sports Direct moved into Adidas, spending £48m on a one per cent, in an attempt to improve its relationship with the German sportswear firm. Adidas is reportedly unhappy with Sports Direct's discounting of its goods and favours UK rivals such as JJB Sports and JD Sports.

Seymour Pierce analyst Richard Ratner said: "Whether or not this is a positive move for the company, and at this stage it is difficult to tell what impact the stake will have, the City will not like this.

"We expect the turbulence the shares have seen to continue and urge caution."

In a time when Sports Direct is struggling in much tougher trading conditions, with profits and sales already hit by the wet weather this year, attitudes towards the firm have also been hardened by Mr Ashley's other distractions.

In June, he launched a £131m takeover of Premiership football club Newcastle United.

Then he began moves to sack the entire board of outdoor retailing chain Blacks Leisure, in which Sports Direct has a near-30 per cent share - because he disagreed with the board's decision to consider a sale of its Freespirit snow and surfwear chain.

Flurry

Amid this flurry of activity, investors holding Sports Direct's diminishing stock might well be entitled to ask whether management is entirely focused on the core business, despite the firm unveiling plans to add another 40 stores to its 462-strong portfolio this week as well as the trial of three health and fitness clubs.

Nick Bubb, a retail analyst at Pali International stockbrokers, said: "What we have seen so far adds to the feeling that Sport Direct is not fit to be a public company. It was a very secretive company before which is why the market thought they would never float."

Certainly Sports Direct chairman David Richardson - the former finance director of Whitbread who was seen as the steady hand on the tiller to guide the group through its stock market debut - quit the firm just three months after the group's stock market debut.

In fairly frank words by the standards of mostly-anodyne resignation announcements, Mr Richardson said he had been `unable to establish a strong working relationship with the executive team'.

But Mr Ashley has been upset by the lack of support from some investors.

He said: "Some investors have been great and have been very supportive. But some of these City people act like a bunch of cry babies.

"You meet a lot of incredibly smart people in the City who seem to be obsessively focused on the share price that minute.

"I thought the City would be a lot more positive about last year's numbers. Most of my days start badly and get worse at the moment.

"We don't think the share price is a reflection of the company's prospects."

Whether Mr Ashley can act to mollify investors - lifting the flagging share price and spirits in the process - remains to be seen.

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