Sports Direct chief executive Dave Forsey said the retailer’s strategy of being the “Consumer’s Champion” was paying off when he unveiled a 40% rocket in full-year pre-tax profit today.
The sportswear giant is undoubtedly growing at a rate of knots, but is it really the “Consumer’s Champion” as Forsey terms it?
Sports Direct chairman Keith Hellawell describes being the “Consumer’s Champion” as “offering an unmatched range of products at the best available prices”. Using this definition, Sports Direct is clearly ticking all the right boxes.
The retailer is the clear market leader in sportswear after seeing off JJB, which collapsed last year. And, true to Hellawell’s definition, JJB’s demise was down to its inability to compete with Sports Direct on range and, most definitely, on price.
Not only does Sports Direct stock, sometimes exclusively, the must-have brands from Nike and Adidas to Speed, it also has an ever-growing array of own brands.
It has extended some of its established own brands such as outdoor specialist Karrimor, for which it now has a running shoe that Forsey insists is the best in the market at that price point, and has also introduced newly acquired brands such as FireTrap into store.
Its range is only going to get bigger, mainly through its flourishing online channel, a part of the business which founder Mike Ashley devotes a lot of his attention to.
SportsDirect.com now stocks some 180,000 SKUs meaning there is very little in the way of sportswear of equipment that it does not stock. The investment in range online is paying off. Web sales soared 52.1% over the year and now represents 15% of sales and growing.
And Sports Direct has relaxed its pricing stance despite the exit of its main rival JJB from the market. Its reputation as the Primark of sportswear continues.
Yet, despite the unrivalled range and price, to some consumers shopping at Sports Direct still feels like a necessary evil.
Store environment and customer service are the main things that still hold Sports Direct back - and I would add this to Hellawell’s definition of what a “Consumer Champion” must offer.
The sportswear goliath needs to emulate fashion counterpart Primark, which is fast-changing shopper perceptions with its improved in-store standards.
Sports Direct clearly knows its weaknesses and its incredibly generous employee bonus scheme is seeking to improve service in the business. It is also striving to improve the store environment and is trying to move away from the ‘Pile ‘Em High, Sell ‘Em Cheap’ mentality. In fact, Forsey says it has moved away from its constant Sales to focus on bigger, seasonal Sales.
If Sports Direct can get this final piece of the jigsaw in place, it may well become the undoubted “Consumer Champion” and will be a formidable rival to many a retailer.