Sports Direct’s attempted self-elevation is an interesting strategy and a really challenging one.
The business is recognised as a value retailer so shifting to a more premium offer needs to be marketed very carefully. The biggest challenge it faces is getting the respect of brands.
JD [Sports Fashion] has worked hard over the last number of years to build its brand relationships through collaborations, staff training, etc, so for Sports Direct to move into that more premium market and compete more closely with JD will be very difficult. It’s a competitive market and JD is very good at it.
To create a more premium experience Sports Direct needs to overhaul its store experience, as its current retail portfolio doesn’t support such a move.
The firm has so much to prove over the next 12 months if it is to win over premium brands. Shoppers can access labels like Boss and Armani in department stores or from the brands themselves, so what can Sports Direct offer consumers that’s different?
Bringing Sports Direct, USC and Flannels together under one roof makes it a destination store and gives shoppers more choice, but there isn’t much of a crossover in terms of shopper. The Sports Direct shopper is very price led, whereas the Flannels shopper is looking for more premium product. The retailer will need the Sports Direct shopper to trade up or the Flannels shopper to view Sports Direct differently for this strategy to work.
Honor Strachan, lead analyst at Verdict Retail