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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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JD Sports on multichannel development as it releases half-year results

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JD Sports Fashion Group says multichannel investment is helping drive sales and profits. The update came as the retailer, ranked Top50 in IRUK Top500 research, reported sales of £1.4bn in the six months to July 29 – 41% up compared to the same time last year – and pre-tax profits of £102.7m, 33% up on last time.

Executive chairman Peter Cowgill said: "I am delighted to report that the group continues to make strong progress with profit before tax for the first half increased by a further 33% to a new record level of £102.7 million. This is another pleasing result demonstrating the strength of our highly differentiated multichannel proposition and our ability to prosper in an increasingly competitive market for athletic inspired footwear and apparel."

He predicted full-year profits would be "towards the upper end of market expectations," which range from about £286m to £290m.

We took a look at what the retailer said about its multichannel development.

Strategy



JD Sports describes a strategy of "ongoing investment in our international multichannel capability with a significantly expanded multicurrency website estate." It says: "We believe we are creating an industry-leading retail business with the best of physical and digital retail combined to give a compelling proposition and enabling our consumers to shop seamlessly across all channels. We believe that this multichannel capability is a key differentiator for us versus our developing competitor set."

Operations & logistics



The retailer is investing to expand its warehouses. It is spending £21m on expanding its main Kingsway warehouse by 25% to the point where it can house 15m units. It has also spent about €15m on a new 39,000 sq m site in Alicante to expand its warehousing in Spain. That site has room for further expansion.

Mobile & multichannel



JD Sports says its multichannel model, especially in its UK domestic market, underpins the success of its JD Sports Fashion brand. Like-for-like sales grew by 3% at JD and Size? stores in the UK and Ireland, and by 7% in mainland Europe, while online sales grew by double digits. Some 13.7% of total JD sales in the UK and Ireland now take place online – up from 11.1% a year ago. "We will continue to invest heavily in digital innovation and mobile technologies both instore and online, further enhancing the multichannel journeys available to our customers," said JD Sports in its results statement.

The Customer



The shopper experience is a priority for the retailer, which says multichannel means it can enable its customers to "interact with us when, where and through the channel of their choice"

Brand engagement and merchandising



JD says it extends its appeal through "continual engagement with our customers", while high standards of visual merchandising are important both in-store and online.

International expansion



The retailer has opened new stores in most of its existing markets and has also moved its Portuguese stores to a JD fascia, from their previous name of The Athletes Foot. One store is expected to open each week in mainland Europe through the second half of the year.

Other brands



The retail group also owns Top100 retailer Go Outdoors , which reported a £4m profit from its trading activity in the first half, as well as Top100 brands Blacks and Millets , which saw first-half losses narrow to £1.6m from £2.3m last time.

The half-year statement said: "We are still only in the preliminary stages of our planning for an enlarged Outdoors business and we would not anticipate making any material changes to the operations of any of our businesses in the next year. However, we believe that the availability of product in the Go Outdoors stores, and consequently the sales, could be enhanced by having a greater proportion of stock supplied from central warehousing. This is a longer term objective."

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