JJB.L Regulatory News (JJB)

7 Jan 2005 07:00

JJB Sports PLC07 January 2005 JJB Sports plc ("JJB") Trading Statement JJB Sports plc the UK's largest sports retailer, is today providing an update onits trading since the Interim report, dated 13 October 2004, which gave itsresults for the 26 weeks ended 25 July 2004. As a result of continuing challenges within the competitive retail environment,trading conditions since 25 July 2004 have remained difficult. Total turnover ofstores and health clubs for the 23 weeks ended 2 January 2005 was 1.6 per centlower than for the equivalent period last year, which included a like-for-likedecrease in turnover of units that had been trading for over 52 weeks of 1.1 percent. The equivalent figures for the Christmas and New Year period (for the 6 weeksended 2 January 2005) were a decrease in total turnover of 2.0 per cent and alike-for-like decrease of 1.4 per cent. This 2.0 per cent is distorted by thefact that the New Years Day Bank Holiday in 2004 would have fallen within thecomparative 6 week period. We expect that the 7 week period to 9 January 2005,which includes the New Year Bank Holiday, will result in a decrease in totalturnover of 0.6 per cent. The combined gross margin for the stores and health clubs for the 23 weeks ended2 January 2005 was 160 basis points lower than for the equivalent period lastyear. We currently expect pre-tax and amortisation profits for the 53 weeks ending 30January 2005, to be in the range of £61 million to £64 million. Throughout the second half of the year, JJB has continued to sell off itssurplus spring/summer clothing ranges through an aggressive promotional policy.JJB is now more comfortable with its inventory position, its current stock levelbeing approximately 15 per cent lower than at the same date last year. The Boardbelieves that the changes made within its buying and merchandising functionswill help to meet the continuing competition within the retail clothing market. Turnover in the weeks prior to Christmas was proving to be sluggish andtherefore the planned date for the start of the New Year sale was broughtforward to 13 December. This had a beneficial impact on the level of turnoverbut at the cost of some lost gross margin. Turnover in footwear, replica kitproducts and equipment/accessories for the 6 weeks ended 2 January 2005 washigher than in the comparative period last year, but competition within theretail clothing sector, in particular in "value-for-money" ranges, had anadverse impact upon the level of sales in this category. The total number ofitems sold during this 6 week period was almost 5 per cent higher than thosesold in the equivalent period. The level of turnover within JJB's health clubs continues to be buoyant. JJB'sunique concept of a combined health club and retail superstore format continuesto prove successful and delivers a strong value for money offer to its membersand customers. During the 23 weeks ended 2 January 2005, JJB opened a further 3combined health club/superstores, taking the total number of these units inoperation at that date to 21 which comprises 83,400 members. JJB will continueto build upon the success of its Leisure Division by accelerating its openingpolicy; it is intended that a further 18 units will be opened during the yearending 29 January 2006. JJB continues its policy of affecting a measured migration to both high streetsuperstores and out-of-town superstores from small high street stores; the newunits provide JJB's customers with a more complete product range than can bedisplayed in small high street stores. During the second half of the currentyear, JJB opened 8 stores and closed 9, mainly smaller high street storesbringing the total openings for the 49 weeks of the current year to 23 storesand total closures to 34 stores. These openings include the combined healthclubs/ superstores, referred to in the previous paragraph. At 2 January 2005, JJB operated from 437 stores representing approximately 4.22million square feet of selling space and includes 189 out of town superstores,102 high street superstores and 146 smaller high street stores including thoseoperating under the "icon" fascia. This compares to 438 stores in operation at25 July 2004. Further growth in superstores will be achieved during 2005 withplans in place to open 40 sites, including those that will also contain healthclubs. David Whelan, JJB's Chairman, commented: "Whilst I am disappointed with the trading results for the 23 weeks ended 2January 2005, the fact that the shortfall was entirely within our clothingproducts, an area on which we are concentrating our resources, gives me somedegree of comfort. Demand for our other products remains high and our prospectsare strengthened by the performance of our combined health clubs/superstores. The rapid expansion of our combined health club/superstore format over the nexttwelve months and the key role that sport and leisure play in a healthy lifestyle, together with the continuing demand for many of our products will Ibelieve provide a solid platform that in the medium term will deliver a positiveimpact to our profits." For further information, please contact: Tom Knight 01942 221400David GreenwoodJJB Sports Plc Philip Gawith 020 7379 5151Lydia PretzlikThe Maitland Consultancy A copy of this press release can also be viewed on the JJB website,www.jjb.co.uk This information is provided by RNS The company news service from the London Stock Exchange