UK chains rapped over 'misleading' closing down sales
Three British retail chains owned by tycoon Mike Ashley’s Sports Direct business were today rapped for enticing customers into stores with a closing down sale – only for the shops to carry on trading.
The Office of Fair Trading (OFT) said a number of stores branded Sportsdirect.com, Hargreaves (Sports) and Gilesports ran the promotions for several months. They are part of Sports Direct International, which is majority owned by Newcastle United owner Mr Ashley.
Despite telling shoppers they only had a limited time to pick up a bargain, some of the shops ended up either not closing or just shut briefly for refurbishment, the OFT said, misleading customers as a result.
The three companies have not been fined by the OFT because they agreed not to advertise stores for closure when that is not the case. If the stores are to close temporarily then the reason for closure and the intended dates of closure must be clearly advertised.
Officials investigated after receiving complaints earlier this year.
The OFT said: “The advertisements created the incorrect impression that the shop in question was to close permanently and as a result of the imminent closure the consumer only had a short period of time to purchase the goods and/or that only a limited amount of stock was available.”
The businesses will “provide undertakings not to mislead consumers over any future ’closing down’ promotions,” the OFT added.
OFT bosses ruled the promotions were in breach of the Control of Misleading Advertisements Regulations 1988 (the CMARs). Sports Direct disagreed, the OFT said, but has agreed to make its advertising clearer.
A spokeswoman for the OFT would not disclose how widespread the practice was, but Sports Direct operates about 470 stores around the country.
Most are branded as Sports World, but it also operates under the Gilesport, Hargreaves and Sports Direct brands. Gilesport, which is mainly based in Wales, had a chain of about 70 stores when it was bought by Sports Direct in 2006.
Mike Haley, OFT director of consumer protection, said: “Consumers searching for bargains should not be misled by claims about closing down promotions.
“It is important that advertising accurately reflects traders’ intentions to close business premises, and we therefore welcome the positive response from Sportsdirect.com Retail, Hargreaves and Gilesports.”
