Business

JD Sports Fashion Rides Athleisure Boom

Shares up 9% as retail group sees pre-tax profits rise 33% to £102.7 million on strong women's fashion and footwear sales

Shares up 9% as retail group sees pre-tax profits rise 33% to £102.7 million on strong women's fashion and footwear sales Demand for sports-led womenswear continues to drive sales at JD Sports Fashion as the company shrugs off fears of a fashion meltdown on the high street. The retail group, which owns Blacks, Millets, Size and Go Outdoors as well as the JD Sports chain, reported a 33% rise in pre-tax profits to £102.7million in the six months to the end of July, as sales rose 41% to £1.37 billion. Shares in the group rose by more than 9%, taking its stock market value to £3.6 billion, more than £1billion ahead of its rival and former shareholder Sports Direct, which suffered a 60% fall in profits in the year to the end of April. Analysts said JD Sports had beaten expectations in a tough market where a number of other chains, including Next and Debenhams, had warned of shoppers shifting away from fashion towards spending their money on mobile phones, going out or holidays.

The main sports chain achieved a 3% rise in sales at stores open more than a year in the six months to the end of July despite tough comparisons against last year, when sales were helped by the Euro 2016 football championship and the booming athleisure market.

Peter Cowgill, executive chairman of JD, said women's fashion and footwear sales continued to increase by double-digit percentages as young women sought out brands such as Ellesse, Pink Soda and Beyoncé’s athleisure line Ivy Park, as well as the kind of sportswear meant to be worn outside the gym now pushed by the big brands Nike and Adidas.

Cowgill said he did not see a slowdown in that market in the short term: “I’m pleased with trading. I see athleisure as being a culture not a trend. It's like saying, 'Do you think Adidas or Nike will decline?' I don't see it.” The retailer was also helped by its outdoorwear division moving into profit for the first time, helped by the acquisition of the Go Outdoors chain last year.

Cowgill said the group had done well with camping gear, but it was difficult to attribute that directly to a trend towards staycations since the fall in the value of the pound. “I'm not sure if it's about staycations, but we have got better,” he said. Cowgill added that JD was not seeing any real competitive threat from Sports Direct's attempts to move upmarket and become the “Selfridges of sport”. “We are doing very well with a mix of brands and private label. We are first choice for the launch products of the premium brands. When they launch innovations, technologies in footwear and also textiles they want to do it with JD,” he said. Mark Photiades, a retail analyst at Cantor Fitzgerald, described JD's performance as an “excellent achievement”. “JD is clearly differentiated from its closest UK competitor. It also has the support of the leading sports brands in sports fashion. Besides, it has significant potential which could be developed overseas,” he said in note.