JJB Sports cautious despite sales growth E-mail
Tuesday, 17 October 2006

Although JJB reported a rise in revenues for the first half of 12.1 percent to £381.6 million, the company maintained a cautious outlook. "Although we are encouraged by the revenue improvement and the marginal increase in pre-tax profits, difficult trading conditions continue to challenge the margin," said non-executive chairman Roger Lane-Smith. Like-for-like sales increased 9.5 percent

JJB is trying to differentiate itself from its competitors with its "Serious about Sports" strategy, which involves using the slogan in advertising and improving product ranges in stores. The company has built its offer around Nike and Adidas, with lower-priced ranges from a number of brands including Patrick, Olympus , Lotto, Le Coq Sportif and Slazenger. It believes that its "close relationships with both the Nike and Adidas brands will result in a much wider range of exclusive products being on offer at JJB", thereby competing successfully within the market. One of these relationships also resulted in the launch of a new Adidas store within its superstores. The company hopes to duplicate this initiative with Nike. It has also recently begun to stock products from the US apparel brand UnderAmour, with whom it signed a retail and wholesale agreement. JJB said that the expansion of its Leisure Division - the company operates a number of health clubs - was on track and both membership and profit were up. Twelve more clubs are in the pipeline for this year, bringing the total to 44.

The company said revenues and like-for-like revenues increased 8.8 percent in the eleven weeks to 15 October. The gross margin increased slightly compared with that of the comparative period. "Looking forward, the latest trading results give us confidence for a satisfactory outcome to the current accounting period," said Lane-Smith. "However, the retail sector continues to be highly competitive and Christmas will be an important trading period for us. We will continue to be focused upon value, quality and service and to be 'Serious about Sport'".


 
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