JD Sports warns on slower trading
Sportswear retailer steps up store disposals
August 6 2003
Sportswear retailer John David Groups has warned that full year results wil be below expectations.
In the face of continued poor trading, the operator of the JD sports and First Sports chains is stepping up its store disposal progamme as its seeks to shed underperforming outlets.
In a statement to shareholders for the group’s annual meeting, chairman Roger Best said: “Following a period of mixed trading, it is now anticipated that group profits will be significantly below market expectations for the financial year ending January 31 2004.”
In May, the group reported that trading had improved in the seven weeks to May 1 2003. It is now reporting that like-for-like sales fell back sharply in May, with overall like-for-likes in the six months to the end of July around 3 per cent down, made up of a 0.5 per cent fall in the JD Sports chain and a 6 per cent fall in First Sport.
A 3 per cent like-for-like increase during the summer sales period is not sufficient to compensate for the lower gross margin, around 1.5 per cent down on 2002.
So far, 102 First Sport stores have been converted to the JD Sports format. The group said: “In most cases, performance has improved following conversion. However, an unbalanced product offer and slow replenishment resulting from the continuing disruption caused by the acquisition, have affected performance in many stores. A stronger product offering and faster replenishment is expected to help improve performance in the second half.
The group has disposed of 15 First Sport stores, with a further 18 disposals planned for the rest of this year, and 20 more next year. JD said the store closure programme will help to reduce the impact of cross-over locations arising from the First Sport acquisition, which is also being addressed through the conversion of stores to other fascias within the group.
