Newspaper article The Journal (Newcastle, England)

Retailers to the Fore as Half-Year Results Loom

Newspaper article The Journal (Newcastle, England)

Retailers to the Fore as Half-Year Results Loom

Article excerpt

Byline: Peter McCusker

RETAILERS will continue to dominate the headlines this week with French Connection, JD Sports and Debenhams stepping forward with updates.

JD Sports Fashion will put its reputation as one of the UK's top retail performers on the line on Wednesday when it reports half-year results.

The Bury-based retailer, which operates 350 JD Sports and Size? outlets in the UK, enjoyed another good year in 2010 when it stole market share from its ailing rival JJB Sports and tapped into its burgeoning reputation in fashion.

But as well as having to deal with a resurgent Sports Direct and early signs of recovery at JJB, the chain is now facing the potential impact of rising youth unemployment and general signs of strain among its core customers.

Like-for-like sales for the first 18 weeks of the financial year declined 2.8%, compared with a 1.2% decline in the first eight weeks, although the most recent figures were impacted by strong comparatives from a year ago when trading was boosted by the World Cup.

Analysts fear JD, which owns fashion chains Bank and Scotts, is particularly exposed because its core shoppers are bearing the brunt of the economic squeeze.

It has also warned that the Government's austerity measures are hurting its customers and said the hike in VAT could wipe pounds 16m a year from its profits at current levels as it struggles to pass on the increase.

JD has expanded its appeal in the past year after it acquired brands such as Sonneti, Chilli Pepper and Nanny State, and rugby brands Kooga and Canterbury to help give it a point of difference over competitors. It also moved into France, with the acquisition of Chausport, which has 73 stores, while it recently opened the first JD Sports stores in the country.

JD revealed a 21% leap in underlying profits to pounds 81. …

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