Why high-street sports retailers are missing their goals

September has not started well for specialist sports retailers, who have faced a tougher time than most on the high street in 2007. JJB Sports announced last week that it could miss profit targets by 25% this year, while its main high street rival Sports Direct has seen its share price more than halve from 300p when it floated in February to about 137p.

The news is further evidence of a continuing downturn in a sector that has struggled to maintain the success it enjoyed in the 1990s.

Alistair Sim, managing partner of Manchester-based advertising agency Love Creative, has worked on a number of projects for sportswear companies and believes the big sports retailers are becoming functional brands driven by price that offer little in terms of real value to the consumer.

“Their retail offer is akin to that of a market, stacking it high and selling it cheap, with little personality or emotion,” he says. “It’s a soulless experience.” 

Turn-off
Industry experts think that poorly laid out and merchandised stores are major turn-offs for consumers. One source says the overall impression of most sports stores on the high street is poor. He adds that they are seen as old fashioned, with the big players in the sector guilty of thinking consumers do not aspire to anything more.

Sim says: “With the growth of own-brand stores offering a true brand experience managed all the way from sophisticated retail advertising through to expert point of sale advice, it’s no surprise that 16-year-olds would rather spend their Saturday afternoons in Niketown than JJB.” 

Consumers with a real interest in sport are more likely to go to a specialist store where they feel they are talking to an expert and get a sense of authority, believe observers. They point out that a large proportion of stock in so-called sports retailers is made up of the type of clothing and footwear bought more for fashion than sport.

Out of date
Richard Perks, director of retail research at Mintel, believes that particular style has simply gone out of fashion. “It’s like having a fashion store that only sells pink clothes,” he says.

Experts say that fashionable sportswear is now about surfing or outdoor brands, rather than the type of kit sold by the likes of JJB Sports or Sports Direct.

Maureen Hinton, lead analyst at research company Verdict, adds: “Sports retailers have a big share of the footwear and menswear market, and neither of these sectors have strong growth. Men don’t buy as much as women, and stores don’t segment their markets between men and women, who expect a different offer.” 

But it is not just the lack of development that has pulled the sector down. It is facing increased competition from online retailers, department stores and that bugbear of the high street, the supermarket chains. According to Hinton, men are buying more and more clothing from supermarkets.

The lack of a major sporting event boosting sales of replica kits was also cited as a big factor for this year’s disappointing performance. The overriding view is that sports retailers need to build brands to survive, rather than just rely on sporting events, although the London 2012 Olympics is seen as a way of reviving interest in the sector in the long term.

Hinton believes, in the short term, there will be a shake-up that will see the market become more fragmented. She says: “Smaller retailers with specialist stores will move into the high street and there will be more online.”