JD Sports’ new chief pledges culture change as profits dip
JD SPORTS’ new chief has said there is “plenty to do’’ on changing the retailer’s culture, after announcing a slump in profits.
The sportswear retailer posted a slip in profits for the year to the end of January, down at £440m from £654m, after racking up costs from cleaning up earlier acquisitions.
On an adjusted basis, profits were up at £991m from £947m, amid stronger sales, and JD Sports said profits would surpass the £1bn level this year.
Almost a year after Peter Cowgill stepped down from the helm, Régis Schultz was brought in by JD Sports last summer to bolster its governance.
His appointment came after an internal review found that, while the company had ballooned in size, its “internal infrastructure, governance and controls have not developed at the same pace”.
Before that, Mr Cowgill had acted as both chief executive and chairman.
JD Sports said yesterday that it had made “strong progress on governance this year ... although there is still plenty to do to embed a change of culture around the new controls framework”.
Speaking after publishing his company’s results, Mr Schultz hailed stronger sales, which he said were driven by younger shoppers seeing trainers as “an affordable luxury treat”. He said: “Our key customer is a young adult, and the young adult today has more possibilities to get a job today than ever, unemployment is at a low level, that means that they get jobs and they can buy the sneakers they love, and I think that’s really helping us a lot.”
He said these types of shoppers were wanting to buy the latest pairs of trainers and show them off to their friends.
It comes as JD Sports steps up expansion overseas, with the retailer looking to open stores in Europe and the US.
JD Sports has for years been seen as in direct competition with Sports Direct, with the chiefs of the two companies seen as fierce rivals. Mike Ashley’s Frasers Group, which controls Sports Direct, last year swooped for a host of brands from JD Sports, following the departure of Mr Cowgill.
Mr Schultz said Sports Direct was “not a competitor” to his company, with JD Sports a much more global business.