The finance director of the sports retailer John David Group resigned yesterday as the company dropped into the red.
John David Group, the company behind JD Sports, said that Malcolm Blackhurst, 46, who has been with the company for 11 years, had decided to leave the group "to pursue other interests". Mr Blackhurst is likely to receive approximately £100,000 after tax as part of his leaving package.
The past 18 months have been a torrid time for the company as it contended with difficult trading conditions and a clear underestimation of the difficulties relating to the acquisition of First Sports from Blacks Leisure last year.
The company reported a pre-tax loss of £5.6m for the six months to the end of July, compared with a profit of £7.6m last year. Roger Best, the executive chairman, blamed "operational issues surrounding the integration of First Sports". The figures included exceptional losses of £1.1m.
The company has accelerated a programme of store closures, with 21 stores closing so far this year and a further 16 due to close before the end of the year. Although total group sales were up 1.7 per cent in comparison with the same six-month period last year, like-for-like sales were down 2.7 per cent. Matthew McEachran, an analyst at Investec Securities, said this reflected "the disarray in store standards and operations", together with "a weak product offering compared to the previous year".
Mr Best said the results were disappointing but that "in recent weeks, we have witnessed a small but significant improvement in trading". The company, which has made three profit warnings in the past year, was confident its strategy of splitting the company into two separate divisions - sports and fashion - would lead to "a stronger, more profitable business in the future".
Rhys Williams, an analyst at Seymour Pierce, said the strategy "is the correct one" but that there was no "quick fix".
Shares in John David Group closed down 2.5p at 160p.
- More about: