JJB Sports tackling tough trading
Euro 2004 helps reverse sales dip
The sales impact of the Euro 2004 soccer tournament has helped JJB Sports start to reverse a sales decline as it faces a competitive UK sportswear market.
The group has seen total turnover over the 23 weeks to July 4 down by 1.1 per cent, an improved trend on 4.7 per cent fall previously reported for the 10 weeks to April 4. Like-for-likes are down 1.3 per cent over the 23 weeks, compared to 5.7 per cent to April 4.
JJB said it has seen an improvement in sales of replica shirts and other products related to Euro 2004, but at lower margins than on other clothing products. It also said that some of the increased turnover from replica kit products is at the expense of other clothing categories where turnover fell by 15 per cent.
The group has also seen operating expenses increase, mainly due to additional units, including five more combined health clubs and superstores opened since last July. JJB has seen membership at its 18 clubs increase and believes “opportunities for the growth of this unique concept throughout the country are considerable”.
JJB chairman David Whelan said: “I am very pleased with the continuing progress being made within our Leisure division and am excited by the opportunities that we have to grow this part of the business to become an increasingly significant part of JJB.
[img r]jjbsoccerdome.jpg[/img]”The improvement in trading that we anticipated from the Euro 2004 tournament has been clearly reflected in our improved turnover figures, although the impact on our operating profits is tempered slightly by the lower gross margins received on these products.
“Parts of our clothing product categories continue to be affected by the strong comparatives achieved during the period of very warm weather last summer and our success in replica kit turnover during the tournament has also had an adverse impact on the levels of turnover in these categories .
“Competition on the high street remains strong but I believe that our strategies and the opportunities in the Leisure Division, will lead to growth over the next few years.”
Including openings so far, 2004 will see 11 stand-alone superstores, seven combined health club/superstores and around 10 Icon stores open, while, around 30, mainly small stores, will close.
During 2005, 14 health clubs/superstores will open, with two including indoor soccer centres, along with seven stand-alone superstores. JJB has also launched a refurbishment programme for some superstores and high street stores.
