Retailer to fight back with increased products and health clubs
Sports retailer JJB Sports revealed that 'very strong competition' was to blame for pre-tax profit edging only slightly higher to£18.2 million, despite sales growth of 12.1 per cent to£381.6 million in the 26 weeks to July 30.

The company said that it would continue to expand into the health club sector and would offer exclusive products from Nike and Adidas to boost profitability.

Its interim accounts also revealed that like-for-like sales had grown 9.5 per cent in the six months to July 30 and grew a further 8.8 per cent in the 11 weeks to October 15.

JJB chief executive Tom Knight added that a decision from the Court of Appeal on whether JJB would have to pay a£6.7 million fine for price-fixing was due tomorrow.

He said that the 439-store company had increased the amount it had set aside to cover any potential fine from the Office of Fair Trading from£2 million to£3.88 million. The change affected its accounts for the 52 weeks to January 29 this year.

Knight added that, although sales of replica football kits as a result of this summer's World Cup had added£14.1 million in revenue, the impact on pre-tax profit was eroded by price competition, with gross margin down from 49.5 per cent to 48 per cent.

JJB chairman Roger Lane-Smith said: 'I did not anticipate an improvement in trading conditions in this financial year [due to] the climate of severe competition in the sports retail market. These difficult trading conditions continue to challenge our margin.'

He added that the addition of products and brands, such as American label UnderArmour and the opening 12 combined health clubs and superstores - which will take the total to 44 by January - will help JJB to 'flourish'.

JJB said that, as planned, it had closed 20 of its 22 Icon stores and that this process had cost it£1.28 million. The remaining stores will be re-badged in 'the next few weeks'.