JD Sports Fashion has hit the ball out of the park with its latest set of full-year results.
Full-year profits came in well ahead of expectations and its like-for-likes over the nine weeks to last Saturday were in positive territory in spite of the snow and later fall of Easter this year.
Its accomplishments have not been at the expense of margins, no mean feat given the comparably turbulent of its rivals in the fashion and sports arena.
JD has to a certain extent benefitted from its strong positioning in a recessionary market. The lucrative teenage shopper still expects the latest sports fashion brands and discretionary spending is a phrase that probably does not enter their minds.
It has also profited from JJB Sports’ torrid trading and very public troubles.
However, JD’s market-busting performance is not down to its recession-proof positioning or the suffering of its rivals alone.
Indeed, JD’s difference to JJB’s could not be more marked as JD successfully repositions itself as an exclusive branded sports fashion retailer.
It has differentiated its product from the competition, as reflected in its decision to change its name last year to include the word ‘fashion’. This exclusivity of product has also allowed it to avoid heading down the promotional route forced upon most other retailers, as JD is not directly competing with anyone.
It is also branching out to appeal beyond the traditional retail bricks-and-mortar model to attract its younger fashion customer with new brand initiatives including the sponsorship of music events.It has also launched its new discount fashion label website Getthelabel.com.
The iconic Duffer of St George fashion brand will launch in to its JD and Scotts stores this autumn and it is set to benefit from next year’s World Cup in South Africa in the summer.
And in another exciting move, JD will take its Bank fashion brand nationwide. Plans to take advantage of the weakness in the property market mean it will expand the 54-store brand to 150 branches in the next five years.
Again, there are few brands that truly compete with Bank on that scale. Its rivals - River Island and Republic - don’t compete on branded fashion in the first case or scale in the case of Republic.
So the outlook looks rosy for JD. The retailer’s management, led by executive chairman Peter Cowgill indicated that the retailer would have to introduce some price increases on product but that it will benefit from it buying mix and currency hedges, so margins should remain robust.
It has also been able to benefit from negotiating from a strong position on rents. It has also sharpened up its stock management and merchandise planning systems and closed underperforming stores and refurbished a tranche this year. It intends to refine the portfolio further this year.
The future is very definitely bright for JD as it looks set to continue to score home runs.