JJB Sports saw its own share price take a 16 percent dive after a warning to investors ahead of a formal release of its results the 26 weeks to July 29, but the stock gained a couple of percentage points soon after, settling around £1.72 a share. The company’s statement caused some worries through a phrase that mentioned a review of a major program of shop-in-shops launched by its previous management with Adidas and Nike.
It stressed that JJB was fully committed to working closely with both of these brands, but added that it was also seeking a higher proportion of “own brand products” in its stores. The statement revealed that JJB is negotiating with a number of brands to acquire their distribution rights for the UK, as it has done with Patrick and others.
The British sports retailer said the combined revenues of its retail stores and health clubs was 4.3 percent lower than the same period of the previous year, including a decrease of 4.4 percent on a comparable basis. The company attributed this largely to the boost that its retail sales had enjoyed last year through the sale of World Cup-related products, which was not the case this year. In fact, total revenues from retail stores fell by 6.2 percent, but they would have fallen by only 1.3 percent excluding replica World Cup products.
On a positive note, the combined gross margin for JJB’s retail stores and health clubs over the 26-week period was 280 basis points higher than during the same period last year, according to the retailer. However JJB Sports said it made a pre-tax profit of around £8 million (€12m-$17m)before extraordinary items for the period, or £3.5 million (€5.1m-$7.1m)below the group’s original expectations.
As business during the 6-week period up to Sept. 9 was similar to that of the comparative period of 2006, the group flat results for the second half ending next Jan. 27.
The company says it is continuing to expand its chain of combined health clubs/superstores as planned. It plans to open nine more units during the current financial year and up to 14 new ones during the next one.
