WE MAY be in the midst of World Cup fever but no one seems to have told the sports retailers. Last month Sports Division abandoned its pounds 300m flotation. Last week JJB Sports reported like-for-like sales up 3 per cent. And yesterday JD Sports, the weakest of the bunch, chipped in with a mere 1 per cent rise in same-store sales in current trading. That the shares should rise 7.5p on such tidings shows just how far JD has fallen.
Floated at 285p in October 1996, the shares have been savaged by profits warnings. But the buying mistakes which left too many slow-selling secondary brands in stock seem to have been addressed. And JD is confident that its position as a more fashion-oriented counterpart to mainstream chains like JJB and Sports Division is a safer position in an increasingly crowded and competitive market.
Management have also faced up to the problem of overcapacity which has been a concern about this market for some time. Though it opened 29 stores last year, this will be cut to around 15 in the coming 12 months as rents soar to uneconomic levels.
Full-year profits of pounds 9.3m were at the lower end of expectations but the market was pleased with the slight increase in margin. On current year estimates of pounds 10m the shares trade on a lowly forward multiple of six. Cheap, but unlikely to go much further until the company gets some better figures under its belt.