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JD Sports cracks America as sales run past £10bn

JD Sports has reported record results  (PA Wire)
JD Sports has reported record results (PA Wire)

JD Sports today set out plans for another 500-600 stores in the US as its sales raced past £10 billion for the first time.

That ambitious expansion would make it one of the most successful UK businesses in America ever after decades of our top retailers seeing their hopes across the Atlantic crushed.

For the year to January sales jumped from £8.5 billion to £10.1 billion. Profits are nearing the £1 billion mark at £991 million, up from £947 million. It is one of the biggest global sellers of Adidas, Puma and New Balance goods in the world.

The company has 138 US stores, with others under the Size? and Finish Line brands, which will all be converted to the JD brand.

It could end up with 1800 stores in the US by 2028.

Sainsbury’s, as well as Marks & Spencer, Dixons, Tesco and HMV all tried and failed in America. WH Smith has lately done well with stores in US airports under different brand names.

JD shares, up almost 2000% in the last ten years, could keep rising say analysts.

The business is now valued at £8.8 billion, more than Next, generally regarded as the best run retailer in Britain. The stock today fell back 5p to 165p.

New chief executive Régis Schultz, the replacement for industry legend Peter Cowgill, said this morning: “The beauty of JD, the magic of JD is that our buyers are the best in the world. We don’t rely on one brand, we don’t rely on one product…there is always something new coming.”

Shore Capital said: “These remarkable results signify a record achievement for JD Sports Fashion, indicating continued progress across all areas of the business.”

Profit will past £1 billion this year, it expects. In total, JD expects to spend £3 billion on 1750 new stores globally in the next five years.

There was a £550 million charge for the clean-up of previous acquisitions.

While inflation has forced prices higher by between five and 10%, the mostly youthful customers typically don’t have mortgages. The switch to more casual wear in the office has also helped.

“Unemployment is very low, and the young adult is benefiting from this situation,” said Schultz, brought in due to corporate governance concerns around the all-powerful Cowgill, who has both chair and CEO.

Cowgill built the business up over 18 years and was paid £5.5 million in an exit deal.

Chairman Andrew Higginson said: “The arrival of our new CEO, Régis Schultz led to a reappraisal of this strategy and a narrowing of the business focus. We have subsequently disposed of a number of Fashion businesses and are concentrating our resources on fewer initiatives. There has also been a simplification in the organisation of the business with the number of direct reports into the CEO reduced from over 30.”