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JD Sports profits plunge as Blacks losses continue

JD Sports Fashion saw operating profit slump by almost 20% last year, with losses at Blacks Leisure dragging down an otherwise strong 12 months.

Revenues rose to £1.26bn for the 53 weeks to February 2 as like-for-like sales across the group’s retail fascias rose 1.2%.

But operating profit before exceptional items plunged 19.8% to £61.3m as JD’s outdoor arm, comprising the Blacks and Millets businesses, posted a £14.9m operating loss.

This follows last year’s results, which saw a 14.2% decline in pre-tax profits in the wake of the Blacks acquisition.

However JD said performance was improving under a new management team, with stock being better managed and a cost reduction programme in place. The chilly weather helped like-for-like sales at the outdoor fascia “benefit significantly”, the company said.

Sales at JD’s sports fascias, JD, Size?, Chausport, Sprinter and Champion Sports, grew by 10.2% to £854m with like-for-like sales growth of 2.5%, a “very robust performance in the current economic climate”. Operating profit increased by £3.5m to £77.8m.

Within these fascias, the current financial year has started well, with like-for-like sales growing 1.9% in the nine weeks to April 6.

JD’s fashion fascias, which include Bank, Scotts and Cecil Gee, posted a sales rise of 5.8% to £160.4m, while like-for-like sales across Bank and Scotts declined by 4.1%. Sales so far this year have also declined, falling 6.2%.

Executive chairman Peter Cowgill told Drapers that the fashion market was “more volatile and demanding” than sportswear, in which it already has a “mature and refined proposition”.

“There’s one or two key brands which have been more here today and gone tomorrow,” added Cowgill. “The long term reliance [on brands to perform] has been more difficult.”

Republic’s administration in February had also affected sales in the wider market, he said. “Clearly Republic have been clearing stock at beaten down process, which is bound to have some impact.”

Cowgill is planning to “subtly” changing the brand mix at Bank, although he noted there would be no “radical changes” to the line up.

Overall Cowgill was optimistic about the future trading. “The group is exceptionally well positioned with its retail proposition, financial resources and extended management experience to take advantage of opportunities both in the UK and internationally,” he said.

“Whilst the board recognises that recent acquisition activity has impacted on short term returns, it remains confident that the group is well positioned to deliver earnings growth and increased shareholder returns over the longer term.”

Readers' comments (3)

  • Guess another round off sit downs with brands to get more discounts!!!

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  • Nobody knows why J.D bought Blacks, other than a simple exercise in how to lose money. The chain is pointless.

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  • The answer for Blacks is to go high end and focus on increased service levels, they will never compete with the bottom feeders like Go Outdoors, so why try. Get staff who know about stuff, Climbing, Skiing, MTB etc to engage with the customer. Get rid of the brands that are everywhere and discounted, get brands that are functionally designed. Blacks has a good name and a good perception of quality so build on this. Rohan seem to do OK in the walking scene and Rapha is successful and stupidly expensive in the cycling world. These are the customer profiles that Blacks should be targeting. But then again, everything i have just said does contradict the JD ethos!!!

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