JD Sports’ global sales nudged up in its second quarter as it steams ahead with its plans to become the “leading global sports-fashion powerhouse”.
While the retailer’s growth was strongest in North America and Europe, UK sales slipped 0.8%. But CEO Régis Schultz stresses this is because the UK is “more mature”, unlike other markets where it is still expanding and gaining share.
Schultz says “we feel good about our performance in UK”, though points out that the US is already a bigger market for us, and Europe will also usurp it.
We look at where JD Sports is investing for growth right now.
1. International expansion
The business is aggressively expanding its global footprint amid plans to open 250 to 350 stores a year.
This is a central tenet of its aim to achieve double digit sales growth and double digital market share in key regions.
The retailer set out plans last year to invest between £500m to £600m per year with 50% to 60% of spend focused on store expansion in under-penetrated markets.
This includes its flagship store on the world-famous Avenue des Champs-Élysées in Paris, which opened in April ahead of the Olympics.
Schultz says: “In the first half, we made good progress around our strategic priority, opening 85 new JD stores globally.”
The new stores are helping drive sales growth.
Schultz highlights the strong performance across the globe, explaining: “We achieved organic growth in all regions, with our core market of North America – the world’s largest fashion market – and Europe recording double digit growth.”
He emphasises JD Sports’ unique position as “the only global retailer being successful in North America, in Europe, in UK, and in Asia Pacific”.
With the US set to contribute 45% of JD’s turnover by next year, international expansion remains a top strategic priority.
Earlier this year, the retailer completed the acquisition of US sportswear brand Hibbett, which adds “material scale and presence in the US through its 1,179 stores, strengthening further our brand relationships in the world’s largest sportswear market”.
Schultz calls the acquisition an “important strategic milestone”, and it fills a gap in the south east of US for JD, and provides a strong supply chain and back office to support its US expansion.
2. Bigger and better stores
JD Sports is not just investing in new stores, it is also aiming to make its existing shops bigger and better.
The retailer’s recent revamp of its Westfield Stratford store has helped it become its highest turnover and footfall shop globally.
Schultz says these store revamps are very much a focus area, as the sportswear retailer looks to deliver the best possible experience for customers.
The ‘Just Landed’ concept seen in Westfield Stratford will be expanded to other big flagships including Sheffield Meadowhall, Lakeside, Bluewater, Glasgow Buchanan Street and JD Sports’ new Manchester’s Trafford Centre store, which will usurp Westfield Stratford to become its biggest global flagship when it opens next year.
However, the concept is not just confined to flagship stores.
The retailer has four iterations of the format to cover all types of stores, and has currently revamped 70 JD Sports stores globally, with close to 200 expected to be done by the year end.
3. Staying ahead of trends
Schulz praises how JD Sports’ agile, “multi-brand model” allows it to quickly identify and capitalise on emerging product trends before competitors.
He calls its global presence an advantage on this front: “We leverage this by being able to get scale and get to trends before everyone else”
He provides a specific example with Adidas Samba – the silhouette credited for boosting sales at the German sporting giant.
Schultz says: “I was in the US in September two years ago, and I was saying to the team, ‘there are no Samba’s here and they said ‘it never works in the US, its not really the right product for the US’.
However, the retailer took the risk and, in Schultz’s words ‘put in the order’ for Sambas. It is now the retailer’s number one woman’s shoe in the country.
He says this attitude is “what is driving our profitable growth”.
“We are on the front of innovation and new product, and that’s what we provide to the consumer,” he says.
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