JJB Sports, one of the U.K.s largest sports retailers, announced its interim results for the 26 weeks to July 31, 2005. Revenue dropped 6.2% to £340.4 million ($637.6 mm) while operating profit fell 35.8% to £17.6 million ($33.0 mm). Same store sales were off 8.8% compared to last year due to a void in sales created by the positive impact of replica kit sales during the Euro 2004 soccer tournament. JJB management also said that they were facing “difficult trading conditions and strong competition on the high street.”
Gross margin increased 140 basis points to 49.5% compared to 48.1% last year due to slightly higher margins at retail and increased health club revenue, which traditionally has a materially higher gross margin.
“In the shorter term and particularly during the remainder of the current financial year, I see very few encouraging signs within the retail industry that would indicate an imminent end to the difficult trading conditions and strong competition that we are currently experiencing,” Roger Lane-Smith, JJBs non-executive chairman, said in a prepared statement. “I remain very impressed with the performance and potential of the Leisure Division. The development of combined health clubs and superstores is an area which clearly differentiates JJB from its competitors and is an area which has considerable growth potential at highly attractive gross margins.”
>>> Unlike the health of the luxe market in the U.S., Europes High Street appears to be a tough place for retailers in a weaker economic environment…
