As the high street recovery continues to gather pace, many retailers who struggled during the recession are finding their fortunes are slowly beginning to change. One such retailer is JD Sports which, following a much stronger than expected first half, has managed to more than double year on year profits and break its own personal record.
In the 26 weeks to the 2nd of August, pre-tax profits climbed to £16.45 million, comparing hugely favourably with the same period last year in which only £6.09 million was recorded. This strong performance was, in part, due to increased demand for sports footwear, perhaps as a result of this summer’s World Cup and Commonwealth Games.
Additionally, group wide sales during the period rose by more than a quarter to £721 million, buoyed not only by JD Sports’ European outlets but also by the outdoor aspect of the business. JD Sports bought both the Blacks and Millets brands out of administration in 2012 and has since made significant progress, with operating losses in the first half narrowing from £8.9 million to £5.6 million.
Executive chairman at JD Sports, Peter Cowgill, pointed out that while shopping centres and retail parks remain the core strength of the group, its high street stores are also beginning to yield strong results.
He said; “The malls are attractive but the high street is alive and well in a number of areas.
“We’ve focused on creating a strong environment so it gives customers an exciting place to shop.
“There will be further openings in all of our international territories in the second half.”
While JD Sports remains very much a UK retailer, it now operates 12 stores in Germany and 21 in France, and began a programme of new openings in Spain and the Netherlands earlier this year. In total, the group controls 850 stores in mainland Europe.
JD Sports now predicts annual results to come in at the upper end of market expectations, meaning that the full year income should amount to between £78 million and £84 million in adjusted income. The one area of business currently underperforming is the fashion aspect, comprising the Bank and Ark brands, which saw operating losses grow from £6.8 million to £8.2 million – however Mr Cowgill believes that performance in the fashion division will improve as the year progresses.
Analysts welcomed the result, which they believe is a good sign for the future of high street trading.
Freddie George of Cantor Fitzgerald said; “The JD Format, which has been strengthened over the past two years, is clearly differentiated, and has significant potential to be developed overseas with the support of the international sports brands.
“We are also confident that the outdoor and fashion losses will either be markedly reduced over the next two years or, with respect to fashion, management will be under pressure to dispose of these activities.”
JD Sports is clearly doing very well at present but, with strong high street competition from main rival Sports Direct, the brand must keep its eye on the ball to continue its winning streak.
