JD Sports has seen operating profits plunge 20 per cent after losses from its Blacks Leisure acquisition last year weighed on the retailer.
Its outdoor business – the Blacks and Millets stores it bought in January last year for £20m – posted £14.9m of operating losses for the year to 2 February.
This dragged JD’s overall profit before tax down 20.4 per cent to £60.5m from £76m the previous year.
Peter Cowgill, JD Sport’s executive chairman conceded the results were “more disappointing than originally anticipated”. But he said the Blacks deal has given the group “a firm foothold in a different and growing lifestyle market in the UK”.
The retailer has also performed a U-turn on its decision to close Millets after finding the brand was popular with consumers and would work well as an outlet for its own brands.
It plans to keep 60 Millets shops and 80 Blacks stores, with Millets catering for more casual outdoor customers and Blacks stocking technical products for outdoor enthusiasts.
Around 122 outdoor stores closed last year, helping to cut its rent bill and giving it a portfolio of 174 stores.
JD, which sells clothing and footwear from brands including Nike and Adidas, said its core sports stores performed well, with like-for-like sales up 2.5 per cent during the year.
Annual revenues rose 18.8 per cent to £1.26bn.
The group upped its total dividend by four per cent to 26.30p a share.