JD Sports’ earnings boosted by manner for fitness wear – BBC News
by acostae7851996⚫June 7, 2017⚫0 comments
The fashion for wearing running shoes and tracksuits as day-to-day garb has given JD Sports a spring in its step as it reported record profits.
The “athleisure” trend led to an 81% increased number of pre-tax gains last year to 238.4 m.
Even the previously loss-making outdoor brands, Millets and Blacks, have stimulated money for the first time since JD Sports acquired them.
But the company warned of possible inflationary pressures afterward this year.
Peter Cowgill, executive chairperson, said “JD’s continued strength in its core marketplaces is increasingly being complemented by momentum in our international development, with a net increase of 54 JD stores across mainland Europe during the year.”
Like-for-like marketings, which strip out potential impacts of new stores opening, grew 10% over the year.
The company has 900 outlets in the UK. The group opened 54 stores across Europe last year and opened a further two stores in Malaysia. The first JD store in Australia is due to open shortly.
“Whilst we must recognise that there are external influences which may impact the latter part of the year , notably inflationary pressures arising from Brexit, the board remains confident in the robustness of the JD proposition and believes that the group is well positioned for further profitable growth, ” told Mr Cowgill.
Jonathan Pritchard, retail analyst at Peel Hunt, said “Whilst the trainer tendency tailwind has been off the Beaufort scale, JD has sailed it skilfully. Both athletics way and outdoor surpassed expectations.”
JD’s share price rose 4.2% after the bumper results were published.
It has not all been plain sailing for the brand in 2016, however.
A Channel 4 undercover investigation in December quoted employees saying conditions at its Kingsway distribution centre in Rochdale were “worse than a prison”. JD Sports denied allegations that it operated a “three strikes” policy before rejecting workers over minor misdemeanors such as being caught with a cigarette lighter or employing mobile phones, and that workers were being underpaid.
“We were greatly disappointed to be the subject of accusations constructed in late 2016 about running practises in our Kingsway warehouse, ” the company said in its results statement.
“As the well-being of all staff is a key priority for the group and it is an area where we strive constantly to improve performance, the Board appointed Deloitte to conduct an independent its consideration of the allegations made.
“That review has now been completed and Deloitte’s conclusion was that the allegations did not represent a balanced characterisation of working practices at Kingsway.”
The full report has not been published. But JD Sports chief executive Peter Cowgill told the BBC that the report broadly bore out the firm’s denial of wrongdoing.
“I think if you take a very, very small minority[ of cases ], then the tone sometimes could have been improved, but overall, the content of that facility which is open for all to see – we invite anybody, within reason, to visit it … people are staggered by the standards in that facility.
“We carried out in independent report, and that bears out what we said in the first place.”
Mr Cowgill used to say while safety-related rules over the use of mobile phones, lighters and matches in the warehouse would continue to apply, the word “strike”, meaning a warning, had been eradicated.