British retailer JJB Sports said it is “satisfied” with its business in its last fiscal year as it turned the corner on improving margins in the back half of the year. But heavy competition in the value clothing category that hurt sales in the last year is expected to continue to impact business in the current year after a “disappointing” start to the year in certain apparel category sales.

The 10-week YTD business ended April 4 saw a 4.7% decline in total sales versus last year and a 5.7% decline in comparable store sales. The comp declines are due in part to slower t-shirt and shorts sales this year versus last year’s strong performance in March due to warmer weather. On the kit issue, it appears JJB launched its England “away” kit in March this year versus the always stronger “home” kit on the same period last year.

For the full year ended January 25, JJB saw comp store sales dip 3.0% as higher average retail prices were offset by a decline in unit sales. Total retail sales declined 2.0% for the year to £727.4 million ($1.2 bn) from £742.5 million ($1.13 bn) in the previous year. Clothing made up 39% of sales this past year versus 41% in the previous year. Footwear increased one percentage point to 32% of total retail sales and the Replica kit business made up 11% of sales last year versus 10% in the previous year. Equipment & Accessories was flat as a percentage of sales at 12% and Golf & Cycles was 6.0% of sales, even to last year’s share.

JJB points to success from its “premium” brand selection from Nike, adidas and Reebok, supported by “value-for-money” offerings from its exclusive deals with Patrick, Lotto, Head, Olympus and Le Coq Sportif. JJB has also signed a deal to exclusively market Slazenger golf clubs and apparel in the U.K. The retailer said that the Slaz deal, combined with JJB’s decision to exit the upper end of the golf category, has increased margins 240 basis points.

Margin improvement was a major focus for JJB in the back half of the year as they saw GM increase 280 basis points in the 26-week period to end the year to 49.2% of sales versus 46.4% of sales for H2 2002. JJB pointed to improved inventories and fewer markdowns for the period. GM has continued on plan in the YTD 2004 period.

At year-end, JJB operated 448 stores, with 191 “out of town” superstores, 92 high street superstores, 147 smaller high street stores, five golf stores and 13 icon stores. Net selling square footage increased approximately 3.2% to 4.18 million square feet at year-end.

The Leisure division of the company features 17 sites, including three indoor soccer centers, 16 health clubs and 16 superstores, which are also included in the retail figures.