JD Sports and Jessops buck sales trend

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The Independent Online

Sportswear chain JD Sports Fashion bucked the Christmas retail gloom today with a bullish forecast of better-than-expected profits this year.

High street big names such as Next and Marks & Spencer have unveiled falling sales this week, but JD said like-for-like sales rose 2.8 per cent in the five weeks to 5 January.

The firm - one of the strongest retail performers in the current downturn - said it believed current market expectations on pre-tax profit would be "marginally exceeded" in the year to 31 January.



The performance is all the more impressive in a worsening economic climate since the firm also enjoyed a strong Christmas the previous year, with like-for-like sales up 9.6 per cent.

The group also refused to take part in the heavy price-slashing widespread across the high street until launching its sale on Boxing Day.

JD has fared better than rivals such as JJB Sports and Sports World owner Sports Direct because of its strong offering through fashion brands Scotts and Bank.

The fashion brands saw comparative sales rise 12.5 per cent over the festive period, far outstripping a 1 per cent increase for the sportswear shops.

The strength of Scotts and Banks means it has a reduced reliance on replica football kit sales - hit last year by England's failure to qualify for the Euro 2008 football championships.

It has also the broadened the mix of products in its sports business over the past four years, while eliminating under-performing stores and reducing excess stock levels.

The company added that overall like-for-like sales in the 48 weeks to 3 January 3 had risen 3.8 per cent, with profit margins slightly higher than the previous year.

JD was founded in 1981 with one shop in Bury and expanded throughout the North and Midlands during the 1980s before opening its first store in Oxford Street in 1989. The group floated on the stock market in 1996 and now has more than 400 stores.

JD's shares rose 10 per cent following the update. Investec Securities analyst David Jeary said: "JD is developing a track record of beating market expectations and has once again surpassed them thanks to a robust sales performance without margin sacrifice.



Meanwhile, camera retailer Jessops also reported a surprise turnaround in trading after like-for-like sales rose 3.1 per cent over Christmas and New Year.

Shares, which have plunged from 150p two years ago to less than 1p, surged more than 40 per cent as investors also welcomed guidance that Jessops expected earnings of more than £4.4 million in the year to September 30, 2008.

Like-for-like sales have been in negative territory throughout 2008, with the figure for the 14 weeks to January 5 still down 5.6per cent despite the festive rally of 3.1 per cent in the last five weeks of the trading period.

The chain said the positive performance was achieved at the expense of its margin, as it sought to compete with rivals in the challenging conditions.

Leicester-based Jessops has suffered more than most from the intense competition from supermarkets and the internet, resulting in it closing more than a quarter of its stores in 2007 and the axing of 550 jobs in a cost-cutting drive. It now has more than 200 stores and a dedicated mail order division.

It received a boost in September when it extended its banking facilities from the end of 2008 to the end of December 2011.

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