JD Sports has credited the hunger of its younger customers to “get out and socialise” for stronger than expected sales during the pandemic.
The casualwear retail group, which also owns Size?, Blacks Leisure, Millets and Go Outdoors as well as Finish Line in the US, said sales slid by just 6.5% to £2.5bn in the six months to 1 August as its customers shopped online during the lockdown and then quickly returned to shops when they reopened.
Online sales rose sharply in March, restricting the overall fall in sales to 40% year on year when stores were closed. When stores reopened after up to three months of lockdown, group sales were up by an average of 20% against the same period last year. That figure was boosted by a 50% increase at the group’s US business.
“There is no doubt whatsoever that [our younger shoppers] were more resilient,” said Peter Cowgill, the group’s executive chairman.
“They became more frustrated during the lockdown and couldn’t wait to get out again and socialise with their friends. They probably have got a higher level of appetite for socialising and on balance a [lower] risk threshold.”
He added that younger shoppers were more inclined to buy online when stores were closed and that JD Sports’ athleisure wear was “right in the zone” for those stuck at home.
“When we first entered into this period we thought it was going to be more desperate than proved to be the case,” he said.
However, pretax profits for the group slumped 68% to £62m as Cowgill said JD Sports had paid out about £10m in revamping its warehouse operation for social distancing and providing extra protective kit for staff in stores. The shift to less profitable online sales also affected performance. JD Sports said it expected to deliver full-year pretax profits of at least £265m, down from £980m a year before.
Cowgill said there was currently no plan to pay back funds to the government relating to the furlough job retention scheme. He said the scheme had helped JD Sports “preserve large numbers of jobs which would otherwise have been at risk”. JD Sports has also cancelled its interim dividend, saying it was in the best interests of shareholders and the group to preserve cash.
Cowgill said JD, which stopped paying rent to some landlords during lockdown and put its Go Outdoors chain into administration as a tactic to reset rents, was not planning any store closures but indicated that some sites might have to close if landlords did not agree to adjust rents. “Some [landlords] have taken a pretty draconian stance trying to screw every retailer that they can,” he said.