Peter Cowgill, executive chairman of JD Sports Fashion, has said the company disposed of struggling young fashion chain Bank to focus on European expansion as the business “can’t be everything to everyone”.
The business, which this morning reported an 18% increase in pre-tax profits to £90.5m for the year to January 31, said the result of selling Bank to restructuring specialist Hilco last November had been “more positive than expected”. Bank made a loss of £15.7m in 2014.
CowgiIl told Drapers: “One of the main considerations in JD’s success is its opportunity in global markets, so that led us to sell Bank. We needed to focus our efforts on successfully expanding in Europe. You can’t be everything to everybody.”
JD Sports Fashion now has 70 stores in Spain, Germany, the Netherlands and France.
The business has merged its sports and fashion arms for the first time this year as there is “more overlapping than ever before” on cost base and brands are now dealt with on a group basis according to Cowgill.
As well its JD Chain, other fashion retailers within the JD Sports Fashion group include Tessuti, Ark, Mainline, Scotts and Originals. All are profitable.
In January the group announced the closure of its 11-store own brand menswear retailer Open.
The outdoor division, which includes Blacks and Millets, made an operating loss before exceptional items of £4.9m, although this has narrowed from £8m in 2014. Cowgill said it was a “medium term strategy” to return the outdoor branch to growth.
“It’s not a short term plan. Rome wasn’t built in a day but we are reasonably pleased with the progress made so far.”
Cowgill also said online was a “significant” part of the business and showed “strong growth” in the last year. However he added that while JD’s ecommerce business is profitable companies must be wary of prioritising revenue online.
“Companies have to be careful. A lot is made of massive sales online but there is very little profitability in it and that’s what counts”.