From its independent roots in football terrace fashion in Manchester and northwest England, JD Sports Fashion has grown into a 500-store group. Now its chief executive is eyeing Europe.
From Manchester to Paris is a journey that JD Sports Fashion chief executive Barry Bown is likely to be doing fairly regularly later this year when the group opens its first two international stores in the French capital.
While the cross-channel round trip might be pretty easy for Bown to make today, it’s really a pretty epic milestone for JD when you consider that just 30 years ago it was a tiny sportswear indie founded by John Wardle and David Makin (hence the J and D initials) trading in the relatively small locations of Bury and Mossley in Manchester.
Bown himself joined the business in 1983, at a time when JD Sports (as it was then known) had just opened its first Manchester store in the Arndale shopping centre. It was in fact its third store after Bury and Mossley. But it was probably the most important in terms of setting the business up into what it has become today.
“It was a big gamble,” says Bown. “It was a big deal to go from Mossley to a town like Bury, but to go to Manchester was a big leap. JD Sports was very much a backwater indie at the time.”
On the ball
It was the emergence of the football casualwear trend on the terraces in the early 1980s that persuaded Wardle and Makin to take the step into the capital of the Northwest.
“We really aspired to retailers like MC Sports, which were selling Cerutti, Sergio Tacchini and so on, and fashion brands like Lyle & Scott, Pringle and Peter Storm cagoules,” says Bown.
“We realised we wanted to move into fashion and that sports was very much the accessory to that.” That realisation has been at the centre of the JD strategy ever since.
Bown took up the position of general manager of the Arndale store, having met Makin earlier in his retail career when he was a manager of a Greenwoods menswear store.
“David used to come and borrow Barclaycard vouchers from us,” recalls Bown. “I went on to join the British Shoe Corporation’s management scheme, passed the course and was sent to be assistant manager of Olympus Sports in Market Square in Manchester. David happened to come in one day and said in a typically Manchester way: ‘What the fuck are you doing here?’”
The conversation went from there and Bown quickly found himself running JD Sports’ distribution from the back office corridors of the Arndale Centre, as well as managing the branch itself. “We’d literally pick stock and put it into boxes and then drive it from the Arndale to the other stores. It was a small business - you literally had to be the delivery person, the general manager, the toilet cleaner… There were no luxuries. We used to sleep on the shopfloor with the shopfitters when we opened a new store.”
Manchester Arndale became a huge success after Bown tweaked the storefit to create dedicated product areas for footwear and clothing. He says: “With David’s eye for product it was great. But it would be foolish to think there wasn’t an element of ‘right thing, right time’.”
He adds: “We changed from being inexperienced raw enthusiast retailers with a dynamic independent business to being one of the biggest sportswear retailers in the country. “
Bown is at pains to emphasise that the group has kept something inherently early-days-JD Sports within its culture though, when Drapers points out that everyone that works in the retailer’s Manchester head office appears to have an almost geekish and obsessive love of product.
“You can’t be given a manual to make you JD. It’s quite a unique culture. A lot of influential people that work at JD have been with us from the early days,” he says, listing the likes of product director Paul Fox, who has been at the business for 20 years, and head of retail Wayne Davies and HR director Cathy Gallimore, who have similarly lengthy services.
Even chairman Peter Cowgill, who plays an active part in the management of the business, has worked with the retailer on and off since its beginnings - first as Wardle and Makins’ accountant, then as finance director when the business floated in 1996. He subsequently left, returning in 2004 to his current position.
Passion for product
“As long as the team stays together we have the ingredients,” says Bown. “It’s an outdated and overused phrase but we always return to it: ‘product is king’.
I don’t care what slick systems you have, if the product is no good you have nothing.”
JD Sports Fashion’s passion for product and brands and the way they are presented, plus its excellent relationships with suppliers, have certainly helped it to buck the downturn. The retailer posted a pre-tax profit rise of 61% to £61.4m for the year to January 30, far outstripping the growth of most recession-struck retailers.
At its most recent trading update, sales at both its sports and fashion fascias had improved again, with like-for-like retail sales up 4.1% for the 18 weeks to June 5. Like-for-like sales at its fashion fascias, which include Bank and Scotts, acquired in 2007 and 2004 respectively, dipped 1.2% - an improvement from a 3.5% like-for-like fall across the chains for the 10 weeks to April 10. Bank itself moved into positive like-for-like territory, posting comparable sales growth of 0.3% over the 18-week period.
But Bown and his team have a similar obsessiveness about the customer too. Bown, who has an industry-revered collection of vintage trainers, is also a massive music fan and has persuaded the likes of Ian Brown, Shaun Ryder, Paul Weller and, more recently, The View and N-Dubz to wear JD’s stock. While most sports retailers align themselves with football, JD tends to link up with music. Its logo is emblazoned over the steps at the Manchester Arena venue for instance, which has 1.2 million people pass through it each year.
“Fugitive, sort of loose hip-hop, will be the next to break through,” says Bown - some genuine cool speak you don’t expect to hear out of a retail chief executive’s mouth very often.
“It’s a natural extension. Outside work, my first love is football but music is probably on a par. If you are a buyer and want to know what the 15 to 21-year-olds are thinking, just go to the Apollo or the Academy.”
JD itself has begun to evolve almost as quickly as the teenagers are onto the next big thing. Most recently it has set about snapping up brands such as Duffer of St George, Canterbury of New Zealand and Sonneti. Part of this is clearly a ramping up of own-brand strategy but it has also been born out of the need for the business, which is pretty mature in the UK, to show growth to the City.
Some brands will inevitably end up as JD own labels - Duffer is in 75 stores so far - but Canterbury of New Zealand will remain as a wholesale operation. Bown says brands cross his table all the time in the current climate, and that the decision to invest is driven purely by the opportunity management sees, rather than the group simply looking to bolt on labels for its JD Sports, Bank and Scotts chains. “We will buy brands if we think there is an opportunity for them to grow. Sometimes that opportunity means they will be run as a separate operation with separate management teams that we [the board] will help to guide. It is important to stay true to their heritage.”
While JD Sports has 350 UK stores - “we could maybe take it to 375 or 400,” says Bown - there is significant growth potential for Bank, the young branded fashion chain acquired in 2007. It has 75 stores but has potential for 150, not least because rivals such as Envy have either exited the market or are taking time to recover from recent turmoils,
as seen at USC, which went through a pre-pack administration process in December 2009.
“Bank is what we call a ‘boyfriend/girlfriend’ retailer. It targets a slightly older customer than JD Sports - probably the 15, 21 or 25-year-old wanting the newest looks. They might have grown up with JD but they are on to something else,” says Bown.
Bank’s sales are also 50% womenswear, from brands like Lipsy and Rare, while at the core JD Sports chain, womenswear makes up a very small proportion of turnover.
Meanwhile at Scotts, JD’s “classic fashion” fascia, issues with brand mix and image are being addressed. Bown concedes Scotts, which targets the “grown-up JD customer” with brands such as Timberland and Henri-Lloyd, has proved the most challenging to crack. “There are so many people operating in that space. Each town has an independent or two as well.”
Scotts will trial a new shopfit later in the year at locations in the South and East Anglia to help it push a “quality” message. The collapse of Envy should also open up market share to Scotts, concedes Bown.
The retailer also owns Size?, the 17-store sneaker-freak chain initially conceived as a means to test footwear product for the JD Sports fascia. It is still used for that, and given that 51% of JD’s turnover comes from footwear sales off 30% of space it clearly does its job, but Size? has also become a viable business in its own right.
Transporting JD, its culture and its unique product from Manchester to France later this year will be a real challenge. JD is now so well known and so well thought of in the UK that kids arrange to “meet at JD” just as they would meet at McDonald’s. Such recognition takes time to build, and Bown and his team will undoubtedly work hard to get into the mindset of the youth culture in the Parisian suburbs to replicate its “cool” status overseas.
“You’d be surprised. [France] is not that different to the UK in terms of what they’re into,” says Bown, as his next mission gets under way.
JD Sports Fashion
1981 Founded with one shop in Bury, Greater Manchester
1983 Opens first Manchester store in the Arndale Centre. Barry Bown joins as store manager
1989 Opens on Oxford Street in London
1996 Floats on the stock exchange. Has 56 stores
2000 Barry Bown appointed chief executive
First Sport chain
2004 Acquires branded casualwear chain Scotts
2005 Acquires Allsports. Pentland Group takes 57% majority stake
2007 Acquires branded fashion chain Bank
2009 Acquires French footwear chain Chausport