The 80% plunge in first-half profits at JD Sports, mainly attributable to recently acquired outdoor specialist Blacks, looks pretty awful at face value.

The 80% plunge in first-half profits at JD Sports, mainly attributable to recently acquired outdoor specialist Blacks, looks pretty awful at face value.

But the impact of the Blacks deal was well flagged and City expectations for JD remain intact. Assuming a successful turnaround of Blacks and a continued strong performance from the core JD business, the group looks likely to remain in favour with investors.

There’s plenty to do at Blacks. At the time of the takeover Blacks was suffering chronic shortages of stock, high costs and had, in JD’s words, “an excessively large and over-rented store portfolio”.

But change is under way. Since January, JD has shut 93 Blacks shops. The 198 remaining are likely to be whittled down eventually to 150. Back-office systems are also being tightened and by next spring Blacks will be using JD’s distribution and technology infrastructure.

With a lower cost base and efficiencies of scale, Blacks can focus on its real purpose – which has evaded successive managements – to be a great retailer of outdoor goods, exploiting strong own-brands such as Peter Storm.

Getting Blacks fit for the uphill slog will be the task of Ken Reeve, who will become managing director in November and brings experience from Cotswold Outdoor.

The Blacks deal made sense, but given all there is to do, it’s no surprise that JD has no interest in buying troubled rival JJB. JD has enough on its plate for now.

Global opportunity knocks for Asos

Asos was popular ahead of its update as City analysts flagged the growth avenues still open to it. The fashion etailer is likely to attract increasing investor interest from the other side of the pond too. Directors recently returned from the US, where there was keen interest from Silicon Valley-types accustomed to embracing digital business.

Chill winds are buffeting all retailers, but the scale of global opportunity open to Asos surely sets it apart.