A staycation boom fuelled a surge in sales of camping, cycling and outdoor gear at JD Group, helping the company to more than double its profits last year.
Now the owner of JD Sports, Blacks and Millets has agreed to pay back more than £24m in government furlough support after sales remained strong while stores were forced to close during the pandemic, and bounced back quickly after the high street lockdowns ended.
Publishing its delayed annual results, JD Group said total sales rose almost 40% to £8.6bn in the year to the end of January as sales at Blacks, Millets and Go Outdoors jumped nearly 42% to £513.4m, helping the outdoor chains make a profit of £25.9m compared with a loss of £26.5m the year before.
The group’s core sports fashion chains’ sales also soared nearly 40% as they opened hundreds more stores in the US and expanded online, with 30% of UK sales now via the internet compared with 22% pre-pandemic.
“Our outdoor businesses had a much improved year with an elevated demand for holidays in the UK and a general recognition of the physical and mental health benefits of spending time outdoors combining to drive a strong demand for outdoor living and cycling categories in particular,” the company said. Profits for the outdoor division were also boosted by the restructuring of the Go Outdoors chain, which JD put through a controversial pre-pack administration deal in June last year.
Helen Ashton, the interim chair of JD, said the strong results were “achieved in the face of a series of unprecedented challenges including sustained periods of temporary store closures in many markets, constraints in the supply of certain products due to factory closures within the global supply chains of the international brands, widespread turbulence in international logistics and the ongoing administrative and cost consequences resulting from the loss of tariff-free, frictionless trade with the European Union”.
The company said it had not been able to source enough sports shoes, bikes and other kit because of production delays during the pandemic. It said underlying sales were up 5% for the group in recent months but there was still a “global shortfall in the global supply of certain key footwear styles”, such as in-demand Nike Air Max trainers.
JD has also faced its own turbulence with boss Peter Cowgill leaving abruptly last month after a string of missteps, including breaching competition regulations with clandestine meetings with the boss of its takeover target Footasylum and potential price fixing on Rangers shirts.
The board said it had now completed investigations and a review of governance procedures and was making changes to deliver a “more formalised approach to governance, risk management and the documentation and appraisal of internal controls”.
It said the improvements, which included meeting the UK corporate governance code standards, will take 18 months to complete. The effort will include hiring an in-house legal expert on competition law and bumping up other legal, compliance and internal audit teams.
Ashton said the cost of adding more people would be “less than we have been spending on fines or external legal advice”.
Ashton said work to hire a new chief executive and chair for the group was continuing, with a number of “high-calibre candidates” lining up for the chief executive post, “including some who have only recently made their interest in the role known”.
Ashton said the terms of Cowgill’s exit were still being negotiated, but his departure was “not about governance mistakes but about Peter being [nearly] in his 70s and doing an amazing job, but he was always going to step away”.
“It really fells like a new chapter for the business, which is exciting as there is lots of opportunity out there for us,” she said.
