JJB reports further sales pressure

British sportswear retailer JJB Sports today said revenues were running more than 8% lower as it battled “very challenging” trading conditions.

The Wigan-based company, which also owns health clubs, said like-for-like sales in the 13 weeks to April 27 fell 5.3%, while total sales were down 8.3% on 2007. JJB offset some of the sales weakness by revealing an improvement in margins on a year earlier.

JJB also said it had completed its store closure programme, after announcing it was shutting 72 outlets in April – at the same time as revealing a 28% drop in adjusted annual profits to £33.8m (€42.4m). The stores were axed because they failed to make a significant contribution to group profits, with many also near to newer and larger stores in its estate.

JJB’s fortunes have been impacted by its exposure to the replica kit market and the failure of any of the home nations to qualify for next month’s Euro 2008 football tournament.

The group has looked to offset its reliance on replica kits by increasing the proportion of “own brand products” in its stores, adding to existing examples such as Olympus, Patrick and Lotto.

As part of its business review, it has increased the frequency of deliveries to its stores, introduced a store staff incentive scheme and opened a training academy in Wigan.

The company has also committed to open more combined fitness clubs and superstores, a format which has so far proved successful.

Roger Lane-Smith, JJB’s chairman, said today: “Whilst the retail environment remains very challenging, we have taken significant action to strengthen our store portfolio and continue to invest to improve the quality of our stores and product. Our health club division continues to perform well.”