Confirming a report that came out in The Sunday Times in May, which had been initially denied, Peter Cowgill, executive chairman and CEO of JD Sports Fashion, revealed a plan to divide his role before the next annual general meeting of the company one year from now, adding that “a comprehensive process will commence shortly” to this effect. The split had been discussed at the time of the article, but not decided yet, a spokesman said. Cowgill, who is now 68 years old and is a minority shareholder in the company, first became executive chairman 17 years ago, and he later added the position of CEO following the resignation of Barry Bown from that role in 2014.
“We fully accept that the composition of our Board should reflect the current scale, momentum and global positioning of the Group as well as its increased level of market capitalization,” Cowgill added in a statement issued ahead of today’s annual meeting, acknowledging “the need to create additional diversity within its membership” and noting that some board members have served for longer than the recommended period of tenure.
In fact, the annual meeting decided not to re-elect one of the group’s non-executive directors, Andrew Leslie, who has served on the board for 11 years. He was also the chairman of JD’s Remuneration Committee, which has been asked to name a new chairman.
In a trading update ahead of today’s annual meeting, JD upgraded its previous guidance, predicting that the group will deliver pre-tax earnings of at least £550 million (€639m-$757m) for the current financial year, despite the risk of new temporary store closures around the world due to a new wave of Covid infections and the potential repayment of government loans related to the pandemic. In announcing its results for the year ended last Jan. 30, which showed a pre-tax profit of £438.8 million, the management had predicted that they will grow this year to between £475 million and £500 million.
JD plans to announce its results for the first half ending July 31 on Sept. 14.
JD said its performance in the U.K. has been particularly encouraging since the reopening of its stores in the country, although store traffic “remains fragile” while online traffic is “at elevated levels,” in line with the general situation in the British retail sector.
The group is currently recruiting 1,228 young people across the U.K. with support from the government’s Kickstart scheme. On the other hand, JD said it will decide to repay government aid received for payroll costs due to Covid only after there is “certainty on both the full easing of restrictions and the consequences of any further lockdowns during our peak trading period this Winter.”
Following its recent acquisitions in the U.S. and Central Europe, the group has now a network of about 3,300 stores in 29 countries, and most of them are in operation, aside from some temporary closures in part of the Asia-Pacific region. Sales retention has been slightly higher than in the spring of 2020 in the European markets where stores were closed in the early part of this year, JD said.
In the U.S., the new fiscal stimulus given to consumers in March has resulted in higher levels of demand. Following the opening of five new stores and the conversion of six former Finish Line stores, there are now 60 JD stores in the U.S. The company still intends to covert about 50 stores from the Finish Line banner to JD in the course of the current financial year.
As expected, some shareholders criticized the company during the annual meeting for the hefty bonuses paid to Cowgill. JD, which is controlled by the Pentland Group; has already responded to recent new criticism about Cowgill’s compensation, explaining why it has been so high lately. This year’s annual meeting obtained a stronger majority of votes than last year for a new remuneration policy and a new share-based longterm incentive plan proposed by its Remuneration Committee after intense discussions with the shareholders.