JD Sports to invest to hike up outdoor profits

The sports retailer, which posted an 81% leap in full-year profits to £238m, plans to increase its investment in its online division.

The retailer recorded a £1.2m operating profit across its outdoor fascias, including Blacks and Millets.

This figure did not include Go Outdoors, which JD Sports snapped up for £112m last November.

JD Sports’ warned that outdoors would “remain a competitive sector”. However, chief financial officer Brian Small was confident it is an area of the business that has turned a corner after consecutive years of losses.

When asked whether the retailer’s outdoors fascias would continue to raise profits, Small said: “Undoubtedly – Go Outdoors should be adding to the profits of the division and Blacks and Millets is well managed by a team who are outdoor through and through.

“The activities of the two fascias, which are slightly different, are now better coordinated and take the benefit of some of the things that we’re good at, such as our planning systems and warehouse and distribution function.”

Small said JD Sports, which acquired Blacks and Millets in 2012 after the businesses collapsed into administration under previous owners, had taken time to assess the respective retailers before ploughing in investment.

“There are some very good stores in Blacks but there are some fairly poor Blacks and Millets around the country as well,” he said.

“We wanted to know that the offer was right and the business was functioning – it is in much better shape now and we will spend a bit of money on the stores.”

Consolidation?

JD Sports plans to ramp up investment in its outdoor divisions bricks-and-mortar estate, but is the possibility of consolidating the respective fascias into a unified brand on the horizon?

“I think that around the edges there might be small changes but it’s far too early to be talking about them and I don’t think they’ll be huge,” said Small, adding that the retailer had to “be a bit careful” as the Competitions and Market Authority’s probe into its Go Outdoors acquisition is ongoing.

Small stressed that “the outdoor industry is not going to produce the same amount at the tills at JD Sports,” which recorded double-digit like-for-like sales growth during the period against steep comparables.

The retailer, which plans to open its first store in Australia next month with half a dozen slated for year end, has not let Brexit temper its international ambitions.

“We are looking at other areas to expand into even though we’ve got a significant roll-out still to do in Europe,” said Small.

“Certainly other places in Asia are quite likely in the next couple of years and we’d be interested in having a US market position,” he added, although said that the retailer was “not close to any of them at the moment.”