JD Sports on the up while JJB struggles
RIVAL sportswear retailers JD Sports and JJB Sports are due to report half-year figures this week amid mounting controversy in the sportswear sector.
JD Sports has been relatively resilient throughout the downturn, reporting sales lifts and profiting from the ailing fortunes of its rivals.
Selling mainly sportswear fashion, rather than sports equipment, it has been cushioned by its young customer base – loyal shoppers who are relatively unaffected by the crunch.
But analysts have sounded caution that the group may be hit by an explosion in youth unemployment which will lead to a drop in young peoples’ spending power. Official figures show more than one in three youths under 25 are now jobless.
Analysts expect the executive chairman Peter Cowgill (pictured right) to tomorrow report pre-tax profits between £13.7m-£14.5m – up from last year’s profits of £12.4m for the same period.
JJB Sports, however, has been dogged by share scandals, plunging sales and a series of bad business decisions taken by former members of the executive management team, which in its own words “brought the Company dangerously close to insolvency”.
The group is now in the middle of an OFT and SFO investigation into possible illegal agreements between former JJB chief executive Chris Ronnie and his close friend Mike Ashley, owner of rival Sports Direct.
JJB and executive chairman Sir David Jones (pictured left) have had to fight hard to rescue the retailer from the brink.
The group warned earlier in the year that any improvement will not be a quick fix, and there will not be “any significant improvement in sales until the fourth quarter of 2009”. Analysts will now be watching for the group to offer on Thursday a slightly more positive outlook.