Blog: Sports retailers race ahead
Leonie Barrie | 14 December 2009
Shareholders in two of the UK’s biggest sports retailers were buoyed last week after Sports Direct posted a 39% hike in first-half pre-tax profit and rival JJB Sports named its new chief executive after nearly a year of searching.
The hiring of electronics executive Keith Jones, group retail director of DSG International, is a major relief for JJB Sports, which was dragged back from the brink of administration earlier this year. It also follows the unsettling exit of its previous boss, who was suspended after an investigation into the disposal of his stake in the company.
However, it will be no bed of roses for the new man. The firm’s executive chairman Sir David Jones has been embroiled in controversy over a personal loan, and in September the retailer saw its half-year losses widen to GBP46.0m (US$74.4m).
Sports Direct, meanwhile, raised its full-year earnings guidance on the back of its results, which included a 10.1% jump in revenue. The retailer said it intends to continue its international expansion after global sales rose 22.8%. But it is also setting its sights on South Africa and next summer's World Cup – and the expected upturn in business that comes with every major football tournament.
Inditex, Europe’s biggest clothing retailer and owner of the Zara fashion brand, has also been buoyed by international growth – particularly its aggressive expansion in Asia. While its profit for the first nine months of the year fell 1% to EUR831m, sales rose 6% to EUR7.76bn (US$11.44bn), with rapid growth in China, Japan and South Korea helping to offset a slowdown in Spain.
Japanese retailer Aeon, meanwhile, has ditched its 54% stake in US women’s wear retailer Talbots as part of a deal that will also see the repayment of $491m in debts to Aeon. Under the plans, Talbots will merge with special purpose acquisitions company BPW, and has also agreed a $200m credit line with GE Capital. This should leave it with around $160m of debt.
The deal was announced as Talbots posted a third quarter profit of US$17.2m thanks to tight control of costs and expenses. But sales slipped 13.5% to $308.9m.
T-shirt and underwear maker Hanesbrands has also refinanced its debt to give it more flexibility to focus on growing its business and now says it is looking out for possible acquisitions. The company, whose brands include Playtex, Champion, Wonderbra and Hanes, said its new debt terms allow it to target takeovers in the $200m to $300m range – and that any potential acquisitions would be in core apparel essentials categories.
Over the past month, Donald Trump and his team failed to offer any clear plan to ensure Americans would "Buy American, Hire American" - while the British government's attempts to clarify the specifics...
The Bangladesh government was forced to respond late last week to pressure over its crackdown on labour activists after a number of global brands and retailers, including H&M and Inditex announced pla...
Fresh from their disappointment at seeing the Trans-Pacific Partnership (TPP) free trade deal abandoned last month with an executive order by President Donald Trump, the US apparel and footwear sector...
With the ultimate aim of ensuring all the cotton in its products is sourced sustainably, value clothing retailer Primark is adamant that having a business model focused on offering the lowest prices o...
- What TTIP might mean for US, EU textiles & apparel
- Unlocks for the future fashion sourcing landscape
- EU eyes mandatory due diligence for apparel supply
- Four steps to reduce product defects
- Geo-political uncertainty and how to survive it
- US Q4 in brief – Finish Line, Oxford Industries
- H&M, VF Corp and Levi among most ethical companies
- Sears has "substantial doubt" of future
- Vietnam limits hazardous chemicals in apparel
- Target unveils "ambitious" store re-design plans
- Central and East Europe Report Package
- Central America strategic sourcing review - a focus on Guatemala, El Salvador and Honduras
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- When Things Go Wrong - A Practical Guide to Managing Common Problems in Apparel Sourcing
- Outdoor performance apparel 2016: A broader perspective