Sharp fall in JD profits blamed on Blacks’ losses

JD Sports has blamed a plunge in pre-tax profits for the six months to July 28 on losses incurred by the recently acquired Blacks chain.

Profits were £2.8 million, compared to £20.1 million for the same period last year.

Revenue rose 26.4 per cent to £556 million.

JD said it lost an initial £10 million in the Blacks business because of a lack of stock and an unsustainable cost base.

“I stated in April that the recent expansion activity in the group, the relocation of distribution facilities and the resolution of the stock and property issues in the Blacks business would impact results in the short term,” says Peter Cowgill, JD’s executive chairman.

“As expected, this has proven to be the case, but it does provide the group with a very positive platform for future development.

“I am pleased to report that our primary JD fascia remains robust and we have increased our overseas presence with the intention of producing long term value for shareholders.

“The robust trading in the sports fascias has continued since the period end, although trading in the fashion fascias has been more difficult.

“Our outdoor business continues to stabilise and aims to break even in the second half before any restructuring charges.

“As ever, the group result for the full year remains dependent on the sales and margin performance in December and January.

“Notwithstanding the economic pressure on margin and the general increase in taxation and other levies across Europe, the board believes the group is well positioned to deliver results that are within the range of current expectations.”

Like for like sales for the period in the UK and Ireland sports fascia stores rose by 1.2 per cent, while JD opened seven stores in France and three in Spain.

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