JD Sports Counter Retail Gloom with Athleisure Trend
Shares in JD Sports soared to a record high as the retailer unveiled a leap in profits despite the gloom on Britain’s struggling high streets.
Profits jumped 15% to £340m and like-for-like sales – which exclude gains from new shopfloor space – were up 6% in the year to 2 February, making JD a standout performer when some of the biggest names in retail are being forced to close stores.
The retailer, which also owns outdoor brands and is expanding overseas, is benefiting from the athleisure trend, with people wearing sportswear as fashion and not just for sport. The group’s chairman, Peter Cowgill, said JD had also gained from the popularity of chunky footwear, particularly among women. Celebrities including Kylie Jenner have driven demand for chunky trainers, traditionally considered to be “dad shoes”.
Last year JD Sports paid £400m for Finish Line, one of the biggest sports footwear and clothing retailers in the US. It has already converted four Finish Line stores to JD stores, and opened a new one in a shopping centre in Houston.
Russ Mould, the investment director at UK broker AJ Bell, said: “JD is living proof that parts of the retail sector is alive and well. Sales continue to soar as it has found the perfect ingredients to keep the tills ringing.
“It is offering exclusive products and staying abreast of constantly changing fashion trends.”
The group said like-for-like sales at its outdoor business, which includes Blacks and Go Outdoors, were marginally positive over the year despite the prolonged summer heatwave and unusually mild autumn, which hit sales of jackets and waterproof items.
Cowgill said JD was not immune to the problems facing UK store chains, “with lower footfall on many high streets, malls and retail parks combined with cost challenges from increasing minimum wage rates and rises in business rates”.
Therefore, he added: “It is very pleasing that the core UK and Ireland sports fashion [shops], the most mature part of our group, have delivered a further increase in sales and profitability.”