JJB Sports, which is billed as the UK’s largest sports retailer, continues to suffer from strong apparel competition at its High Street stores, a reality that caused the retailer to engage in heavy promotions to liquidate inventories. The promotions hurt sales, margins, and profits as the company’s retail division saw revenues decline 2.3% to £710.6 million for the fiscal year ended January 30 and operating profit fall 15.1% to £103.6 million, or 14.6% of sales.

The declines in the Retail division was more than offset by strength in the retailer’s Leisure division, which is comprised of health clubs and superstores operated within those clubs. Sales for this division jumped 41.2% for the period to £62.7 million for 2004. Operating profit for the Leisure division increased 17.0% versus the prior year.

Total sales for the company, excluding the divested TJ Hughes business, inched up 0.2% to £773.3 million, compared to £771.8 million last year. Excluding the impact of an extra week this year, sales actually declined 1.1%, while comps were down 1.2% for 2004.

To strengthen their exclusive product offering, JJB said it converted its previous royalty deal with Slazenger to an irrevocable 999 year license for the brand. The deal was pegged at £10 million for the exclusive rights to design, source, and sell Slazenger brand golf clubs, balls, clothing, footwear, and accessories in the European Economic Area. JJB also inked a royalty agreement to design, source, and sell Maxfli brand golf product in the U.K. and Eire.

The JJB numbers appear to indicate a less robust sporting goods retail market in the U.K. than in the U.S. market. Company chairman David Whelan said in a release that the “Trading conditions are as difficult as any I have known for some years,” a situation he says is a reflection of consumers tightening their belts that is “fueling competition between retailers.”

Looking ahead, JJB said that total revenues declined 1.3% for the 10 week season-to-date period ended April 10. Comps decreased 1.2%. The release of the new England replica shirt before an early Easter this year boosted sales during the period, suggesting that sales for the first quarter will decline more than the STD numbers currently indicate.

JJB operated 438 stores at year-end, opening 15 superstores and eight “icon” stores, while closing 33 smaller stores. The retailer had 4.3 million square feet at year-end. JJB also said they recently signed a deal to open an e-commerce site for the first time. The retailer plans to open 33 new stores this year. By January 2006, JJB expects that roughly 46% of their store base will be new or refitted.