JD Sports Fashion reported narrowed interim losses at its outdoor division and was upbeat on future prospects as it pinned hopes on more people taking domestic holidays in the wake of the Covid-19 pandemic. Operating losses closed slightly to £14 million (€15.5m-$18.3m) from £16.4 million in 2019. Sales at the unit, which includes Blacks Leisure, Millets and Go Outdoors, fell by 30.2 percent to £142.5 million (€157.6m-$185.9m).
The company said the restructuring of its outdoor businesses in the last two years “has been a difficult process”, which included the administration and repurchase of the Go Outdoors retail chain, against which it took a £20m (€22.1m-$26.1m) charge.
“However, coming out of this process, we are increasingly confident that we are developing a proposition which helps customers get the most out of their time outdoors and that we are well placed to take advantage of the opportunities in general fitness and local holidaying which will likely prevail in the future in a world changed by Covid-19,” the company said. It noted that losses narrowed even as stores closed for a number of weeks during the coronavirus lockdown and a relatively weak transfer of sales to online compared to the sports fashion fascia.
JD Sports said that it has merged the stock files of the Blacks and Millets business with Go Outdoors to make stock management more efficient with common merchandising systems and shared commercial resources across the businesses.
Overall, the group forecast annual pre-tax profits of at least £265 million (€293.1m-$345.7m) as it reported better-than-expected sales in the first half despite the pandemic. Revenue slipped by just 6.5 percent to £2.5 billion (€2.8bn-$3.3bn) in the six months to August 1. The interim dividend was scrapped to save cash as half-year pre-tax earnings slumped to £41.5 million (€45.9m-$54.1m) from £129.9 million due to persistently weak store footfall.
Physical retail sales received an initial boost after lockdown measures were eased, especially in countries where fewer people shop online, but this has been “generally short lived” with footfall significantly weaker, particularly across Europe. The company also attacked landlords trying to charge rents based on “outdated contractual principles”, adding it had reached tentative agreement with a number of landlords, “although others are more intransigent in their approach.”