JD Sports profits drop due to its Blacks acquisition

Press release   •   Apr 17, 2013 16:01 BST

JD Sports Fashion's pre-tax profit plunged 18.3% to £55.1 million in its last financial year as losses from its Blacks acquisition, which it acquired last January, hit the group.

The group's core sports stores saw revenues grow by 10.2% to £854 million, with operating profits up 4.7% to £77.8 million.

But its outdoor stores, which include Blacks and Millets, made operating losses of £14.9 million, though JD said their performance had since improved thanks to a new management team, better stock management, an ongoing cost cutting programme and investment in stores.

The retailer said performance was improving in its outdoor fascias now that its new management team, led by former Cotswold Outdoor buying and merchandising director Ken Reeve, had been installed. It said its like-for-likes in the business had "benefited significantly" from both the cold weather and a sustained clearance programme from January to March.

The group closed 122 Blacks and Millets stores over the year, leaving it with 174 outdoor clothing stores in the UK. JD Sports wants to cut this to 140 in the long term.

"The core sports fascias in the UK continue to produce excellent results and provide the group with a very solid foundation for ongoing profitability and cash generation," said Executive Chairman, Peter Cowgill.

"We are pleased overall with the start that we have made to the new year. A very considerable amount of reorganisation in both outdoor retail and our warehousing and distribution operations is now behind us and this should benefit trading in the balance of the year."

Mr Cowgill insisted that the worst was over and that deals with key brands such as outdoor label Jack Wolfskin were driving customers back into its stores.

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