JD Sports Fashion has further strengthened its position in the resilient young-fashion market, generating sales across its fashion stores up 12.5 per cent for the five weeks to January 5.
JD revealed it would beat market profit expectations when it posts preliminary results in April.
Chief executive Barry Bown said he had deliberately avoided the trend to cut prices ahead of Christmas. “We set a path and a strategy irrespective of what was going on in the market,” he said.
Although JD’s rivals, notably JJB Sports, have struggled during the downturn, JD’s differentiated product offer and fashion fascias – especially Bank – lifted its sales.
Singer Capital Markets analyst Matthew McEachran said: “Although maintaining sports fascia profits next year is likely to be extremely tough, we believe the fashion fascias can advance, helped by further control of the estate coupled with the improving performance at Bank.”
Group like-for-like sales were up 9 per cent for the festive period, while the sports fascia achieved a 1 per cent advance.
Bown said that although the year ahead would be “challenging”, retailers would do well if they had a “compelling proposition” for consumers.
He did not rule out acquisitions in the coming year, but insisted that he was not looking at JJB’s fashion fascias, Qube or Original Shoe Company. JD has an 8 per cent stake in JJB, which has prompted speculation that a deal might be on the cards.
Bown also revealed that JD will launch Getthelabel.com next month. The website will take advantage of the growing online discount market and will offer cut-price lines to customers.
In general, analysts were encouraged by JD’s better than expected performance. Numis analyst Nick Coulter said: “Deducting the – now questionable – investment in JJB stock, we forecast January 2009 net funds of£18m. This leaves JD in an exceptionally strong position to weather the downturn, and potentially take advantage of opportunities arising.”
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