JD Sports profits plunge after heavy losses at Blacks
Sportswear retailer JD Sports saw its first half profits fall by 85% after heavy losses at Blacks, the outdoor leisure chain which it bought out of administration in January.
The group said the Blacks business made an operating loss of £10 million as a result of supply discontinuity following the administration and an "excessively large and over-rented store portfolio". However, JD said the vast majority of the losses incurred in the first three months and that Blacks' stores were now fully restocked with a central cost reorganisation programme ongoing.
In the 26 weeks to 28 July, revenues at JD Sports increased by 26.4% to £556 million but profits dropped to £2.88 million from £20.07 million in the previous year.
Gross like-for-like sales in the group’s core UK and Ireland retail divisions rose 1.1%, including a 1.2% rise in Sports and a 0.7% rise in Fashion. JD said the performance had been helped by continuing strong growth in online sales.
Since the end of the first half, JD said like-for-like sales for its core UK and Ireland retail divisions in the six weeks to 8 September had grown by 1.6%. This was driven by Sports, where sales were up 3.2% and offset a 6% fall in Fashion.
Chief executive Peter Cowgill said: "As ever, the group result for the full year remains very dependent on the sales and margin performance in December and January.
"Notwithstanding the economic pressure on margin and the general increase in taxation and other levies across Europe, the Board believes that the Group is well positioned to deliver results that are within the range of current expectations."
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