The chief financial officer of JD Sports Fashion Group, Brian Small, has said the retailer is unfazed by the tough UK trading climate and the struggles affecting Debenhams and House of Fraser.
JD had another record half-year for the 26 weeks to 4 August as group EBITDA jumped 26% year on year to £171.8m. Revenue increased 35% to £1.8bn, while profit before tax was up 19% compared with 2017.
It said total like-for-like sales growth of 3% was “encouraging”, despite a backdrop of “widely reported retail challenges” in the UK.
Small told Drapers JD was focused solely on its own strategy: “We’re not concerned about the wider UK market. We’ve always concentrated on what we’re doing. We like to have the best stores in the best locations.
“Debenhams and House of Fraser have legacy stores, but our portfolio is well invested and we’re very proud of it. Our business survives so well because of our constant attention to the needs of our consumer.”
Small added a strong multichannel offer has been key to weathering the changing retail climate: “Our UK portfolio is pretty full and it continues to perform very well. We’re certainly seeing the same pressures as other retailers as shoppers migrate online, but we have a good multichannel offer. You have to be nimble in this market.”
On Brexit Small called for further clarity from the government as the UK’s exit from the European Union draws closer: “Like everyone else, we are planning for Brexit. The problem is there is only so much we can do for the unknown. There is too much uncertainty around what’s going to happen and that isn’t good of retail business.”
He added: “The EEC [European Economic Community] was good for JD, as it made expanding across Europe relatively simple.
“If we leave the duty-free zone, there would be at best a lot more administration. We would certainly prefer to remain in a duty-free trading zone.”
During the half-year JD Sports continued its international expansion. It opened 18 net new stores across mainland Europe, and 21 stores in Asia-Pacific, including its first stores in South Korea and Singapore.
Small said it will pilot five JD stores in the US for the first time in the second half of the financial year, following the acquisition of US retailer Finish Line earlier this year: “It was always our intention to trial JD in the US as soon as possible.
“It’s in the hands of our brands in terms of stock supply but it is our intention to open five stores in the second half as a first test and I’d expect quite a few more in 2019.”
He added that JD Sports will launch in Thailand for the first time in second half with its Malaysian franchise partner.