Trading conditions for brick-and-mortar retail are tough, we are often told. But JD Sports, the UK sportswear retailer, has bucked the trend by reporting impressive results with like-for-like sales for physical and online channels combined increasing more than 5%.
Stripping out eCommerce, like-for-like sales in JD Sports stores still increased, albeit by 1%. This contrasts very favorably with the depressing scenario facing many big-name retailers, who hope that the growing contribution from eCommerce will increase more rapidly than the fall in sales through physical stores, which are dropping at sometimes alarming rates.
JD Sports group
Another point of contrast is that while other High Street retailers are closing stores, JD Sports opened net 83 new stores with 78 of them in international markets, reflecting the company’s desire to keep expanding beyond its UK roots.
Thanks to an aggressive acquisition strategy, JD Sports group revenues increased 49% to £4.7bn and pre-tax profits rose 15% to £340m. It is seeking to acquire Footasylum, a rival sportswear retailer which, unlike JD Sports, has experienced very difficult trading.
Millennial Focus
What is the secret of JD Sports’ success? There is no one factor, of course, but executive chairman Peter Cowgill attributes the good results to the company’s decision to focus on millennials and Generation Z shoppers, its core demographic. He says:
“Consumers expect our product and brand mix to be emotionally engaging, exclusive and continually evolving with high levels of social media penetration and an increasing pace of technology adoption across our core demographic ensuring that new styles and trends spread rapidly across a wide geography.”
To satisfy these trend-conscious young consumers, JD Sports puts a “relentless focus” on ensuring that the company offers a differentiated consumer proposition and on achieving the necessary agility in its operations to keep up with changing consumer demands.
Many retailers tell us that agility is of growing importance to retail success and not just in trend-conscious sectors like sportswear retailing. Visit our website to discover how Orisha Commerce Cloud can help you achieve greater merchandise management agility.
Success factors
According to JD Sports, other factors contributing to its success include:
- Respecting the differentiated and often exclusive nature of the product assortment by avoiding unnecessary short-term reactive discounting
- Maintaining maximum flexibility in the leased property portfolio
- Delivering in-store initiatives to improve efficiency of store operations
The achievements of JD Sport are impressive as the sportswear sector is highly competitive and has multiple points of distribution, including direct-to-consumer competition from the international brands.
To learn more about how Orisha Commerce has helped sporting goods retailers like Decathlon, watch our on-demand webinar, "Ready for the Omnichannel Challenge in Multi-brand Sports Retailing? or visit the sporting goods retail section of our website.
