JD Sports praises ‘deep bond’ with customers following successful ecommerce transition

The sportswear retailer retained the majority of its revenues after moving consumers online during last year’s Covid-19 lockdowns, but physical retail remains a key component of its long-term plans.

JD Sports has highlighted the strength of its relationship with customers after bucking the trend with its successful transition to online during the Covid-19 pandemic.

In its financial report for the year ending January 2021, the sportswear retailer says it retained around 70% of revenues after moving consumers online when stores were forced to shutter during the first nationwide lockdown. This increased to 100% in November when stores closed for a second time.

As a result, the business posted a profit before tax and exceptional items of £421m, which is down from the £439m it made the previous year, but much better than the £295m it was expected to report. Revenue for the period was marginally higher at £6.2bn.

According to JD Sports, its significant retention of sales and profitability through a period of global uncertainty and multiple store closures reflects the “strength and premium position” of its brand, as well as consumers’ affinity with it.

We are absolutely confident that JD’s premium multi-brand proposition retains its consumer appeal.

Peter Cowgill, JD Sports

“The deep bond between JD and its consumers is one that has been nurtured over a number of years,” says JD Sports’ executive chairman, Peter Cowgill.

“Our teams have risen to the challenges associated with the frequent shift in demand between channels resulting in a strong retention of sales across our various markets, but particularly in the UK and United States.”

The business alludes to having increased its customer acquisition marketing as it transitioned to online, and has pledged to continue investing in data analytics to further enhance its customer insight.

However, despite its successful foray into pure online retail, JD Sports, which also operates the Size? brand in the UK, hasn’t lost faith in the future of bricks-and-mortar stores as non-essential retail opens back up this week. The business plans to continue running a multichannel offering as a source of competitive advantage.

How retailers are rising to the challenge of driving customers back in-store

Between August and October 2020, a period largely free from restrictions in the UK, the retailer saw like-for-like sales in stores grow by more than 4%, despite the “materially lower” footfall in many cities and major shopping centres.

JD Sports is therefore continuing with its programme of opening larger store formats, having already opened bigger stores in Exeter, Plymouth and Brighton. In the new financial year, larger format stores are scheduled to open in “key locations” including Belfast, Edinburgh and Stratford, East London. Further stores will also be opening across Europe.

“Regardless of the fact that stores in a number of markets have been closed for extended periods of time, we believe it is clear that we will build the strongest connection with consumers and gain competitive advantage by operating stores in tandem with a strong online offer,” says Cowgill.

“Stores provide a platform to physically showcase product, offer consumers the opportunity to see and try the product, and give us the operational flexibility and agility to offer an enhanced speed of service for online orders.”

JD Sports also notes strength in the width of its category offer, having seen particular growth in casualwear and sportswear sales. Apparel sales overall represented more than 50% of revenues in the UK. While the brand recognises increased sales in these categories is partly driven by increased working and exercising from home during the pandemic, the business says it does not believe that growth to be a temporary phenomenon.

Cowgill adds: “While Covid-19 has inevitably constrained our short-term progress, we firmly believe that we have a robust premium branded multichannel proposition with our loyal consumers comfortable engaging with us in any channel.

“We are absolutely confident that JD’s premium multi-brand proposition retains its consumer appeal and we look forward to welcoming customers back into stores in our remaining markets in due course.”

Looking ahead, JD Sports has estimated its headline profit before tax for the full year to 29 January 2022 will be in the range of £475m to £500m.

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