JD Sports Fashion emerged as a winner from a gruelling Christmas for retailers as it announced that annual profits would beat expectations.
In a trading update, JD said sales at stores open at least a year rose 12% in the five weeks to 3 January as business boomed at its core sports stores.
JD said it was confident that pre-tax profit before exceptional items for the year ending 31 January would be more than the highest City forecast of £90m. The comparable figure last year was £77m. Shares in the group jumped 7% to 509p after the upbeat statement.
Peter Cowgill, JD’s executive chairman, said: “We’re pleased. It would have been creditable if we had maintained or slightly advanced on the previous year whereas, whether it’s on the year to date or the Christmas trading period, we’ve performed spectacularly.”
JD has capitalised on the growing trend for people to wear trainers and other sports clothing as leisurewear. It has carved out a more upmarket niche than Mike Ashley’s Sports Direct, which focuses on selling large volumes of goods cheaply.
Cowgill said: “We’ve got a great deal of trust from the major brands and they supply us with the latest launches of trainers first so it widens the gap between us and the competition. It’s not just trainers – we have the best Timberlands, the best Vans, the best Converse.”
Cowgill said JD’s own fashion brands Duffer of St George, Supply and Demand and Brookhaven sold well and that online sales were up by more than 40% over Christmas.
Britain’s retailers endured their toughest Christmas since the financial crisis struck as big discounting took its toll, industry figures showed this week. Fashion stores were left with unsold stock after an unusually warm autumn, and a surge in sales on Black Friday at the end of November distorted trading for some chains.
Cowgill said he was “agnostic” about Black Friday.
“Maybe I’m a bit of a pragmatist. I tend to think there’s a certain consumer spend available in a certain period of time. I’m not sure more gets extracted over a period of time but it gave us an early boost to the performance.”
JD said in September that it would step up overseas expansion after doubling profit for the first half. The group, whose businesses span its own-name sports outlets, outdoor shops Blacks and Millets and fashion chains Scotts and Tessuti, plans to open 30 stores a year outside the UK, up from 20 last year.
JD sold its struggling Bank Fashion chain to Hilco, the turnaround specialist that owns HMV, in November but the business entered administration last week. Bank was the exception to the strong performance of JD’s various high street brands.
