Continuing problems at the outdoors specialists Blacks and Millets have weighed down profits at JD Sports Fashion.
The outdoors businesses, bought for £20 million out of administration in January last year, delivered results that were “more disappointing than originally anticipated”, JD Sports said today.
Shares in the retailer fell 22p, or 3 per cent, to 720p in morning trading, valuing it at £350 million.
JD Sports, which sells clothing and footwear from brands including Nike and adidas, said that pre-tax profits fell 18 per cent to £55 million in the 53 weeks to February 2. Annual revenues rose 19 per cent to £1.26 billion.
Despite their poor performance, the acquisition of Blacks and Millets has given JD Sports “a firm foothold in a different and growing lifestyle market”, the company said.
JD Sports has said that it reversed plans to scrap the Millets brand because of customer enthusiasm. Both Millets and Blacks will be retained, with Millets aimed at causal outdoors enthusiasts and Blacks providing more expensive specialist equipment.
The company has closed 122 outdoor stores in the last year as it seeks to cut a high rent bill, resulting in a portfolio of 174 stores. This will be reduced further to about 140 outlets, ten more than originally planned.
About 60 surviving stores will trade under the Millets name, which JD now regards as a suitable outlet for its own brands Peter Storm and Eurohike. It added: “The Blacks stores will primarily stock more technical products from the premium brands at higher price points with Millets catering for a more casual outdoor customer.”
JD Sports also has been on the fashion acquisition trail. This year it has bought Gio-Goi and Cloggs, and last year it acquired Cecil Gee from Moss Bros to give it access to more upmarket menswear labels, such as Polo Ralph Lauren and Hugo Boss.
The move echoes that of its biggest rival, Sports Direct, which has been snapping up fashion chains such as Republic and Flannels, based in the North of England, as it attempts to move beyond discounted sportswear.