JD Sports hails record year despite UK high street woes
JD Sports has posted record results despite the UK’s high street crisis, as the sports retailer looks abroad for further growth opportunities.
The group reported a 49.2% increase in annual revenue to £4.7bn for the 52 weeks to 2 February, coming in at the higher end of market expectations. Meanwhile, profit before tax was up 15.4% to £339.9m.
JD said it was “not immune” to the challenges facing the UK retail sector, but that its British and Irish business had delivered a rise in sales and profitability.
The performance has reinforced management’s belief that bricks-and-mortar stores are still having a positive influence, as the estate “raises brand awareness, provides consumers with an opportunity to physically see and try the product, and enables us to provide multiple delivery points”.
Globally, the company opened a net 83 new JD stores with 78 of these in international markets as the group turns its attention abroad.
Executive chairman Peter Cowgill said: “We firmly believe that the elevated and dynamic multibrand, multichannel proposition of the core JD fascia, which enjoys the ongoing support of the key international brands, has the necessary agility to continue to exceed consumer expectations and prosper in an increasing number of international markets.”
Richard Lim, chief executive of Retail Economics, said: “These results show that standing out in a crowded market with exclusive products, a unique proposition and placing the experiences at the heart of the store is a winning formula in today’s digital age.”
In the US, the first five JD stores were opened, including four conversions of existing Finish Line stores. JD bought the American retailer last year and has been working to improve its profitability.
According to Tuesday’s update, sales densities have improved at Finish Line after an overhaul of the appearance of stores. Several key members of JD management have been seconded to assist the Finish Line team.
Cowgill added: “We believe that our acquisition of the Finish Line business in the United States, the largest market for sport lifestyle footwear and apparel and the home to many of the global sportswear brands, will have positive consequences for our long-term brand engagement whilst significantly extending the group’s global reach.
“We maintain our belief that Finish Line is capable of delivering improved levels of profitability.”
The results come just days after JD’s £90m offer for UK retailer Footasylum was declared unconditional. It plans to combine the business with JD, delivering “significant operational and strategic benefits going forward”.
It was also announced earlier this month that JD had bought Pretty Green, the clothing brand founded by Oasis frontman Liam Gallagher.
Tuesday’s results revealed that the company paid just £1.5m for the Pretty Green brand, its website and its flagship Manchester store. The deal assumes a further £1.8m of debt.