On Tuesday, JD Sports documented record-breaking half-year profits. The sportswear giant retailer has around 450 stores in the UK, not including another 1,500 outlets across the globe. Peter Cowgill, Executive Chairman of the company, said its higher profits were “extremely reassuring” despite the challenges facing the retail sector in the UK and Ireland.
He went on to say “This reflects the value of the investments that we have made over a number of years in developing a dynamic multichannel proposition, which marries the best of physical and digital retail enabling customers to interact with us where and when they want and through the channel of their choice.”
The company’s pre-tax profit rose by 19.1% to £121.9m for the six months to 4 August, while revenues saw a rise of 35% to £1.8bn and the retailer have insisted it won’t close stores despite some retailers moving the larger part of their activity away from bricks and mortar within the past couple of years. Its in-store sales including online rose by 3% and the experts are expecting this figure to increase for the next period. These results have boosted shares in the company, leaving the company worth close to £5bn.
This record-breaking result can also be attributed to the UK retailers £396m purchase of Finish Line, one of the largest sports footwear and clothing retailers in the US. This was a strategic plan to expand and tap into the vast opportunities in the American market. According to Stock Market Wire, “Sales were also boosted by the opening of 44 new JD Sports shops during the period and the company plans to open 18 new shops a week across mainland Europe in the second half of the year.”
The wearing of sports clothing beyond the gym (athleisure) has been a trending fashion statement in recent times, which was emphasised by Amy Higginbotham, the retail analyst at GobalData saying “This, as well as its ability to remain relevant and engage with customers through the sponsorship of athletes like Anthony Joshua, sets it apart from emerging online competitors such as Gymshark, Asos and boohoo.com,”.
While other “athleisure” retailers like Footasylum have seen shares drop drastically in recent weeks following difficult trading periods in July and August, JD Sport’s shares have risen by 43% so far this year and profits for the year are expected to be around £345 million. On the other hand, JD’s outdoor business that comprises of Millets and Go Outdoors brand suffered a loss of almost £4 million but this is a small part of the business when compared to main business.
The company has said they continue to see value in high street store and does not plan to close any retail outlet due to the social nature of customers.
JD Sports opened its first store in the UK in 1981 and the first store in London was on Oxford Street in 1989. It took over the First Sports chain in 2002 acquiring over 200 more stores during that period.