SPORTSWEAR retailer JD Sports warned yesterday that it expects “substantial” losses from its outdoor clothing stores, but said its performance is in line with expectations this year.
The UK company said its outdoor clothing and equipment lines Blacks and Millets had seen positive like-for-like sales over the 18 weeks ended 8 June, but at a “significant margin sacrifice”.
It expects the two struggling brands to make a “substantial but significantly reduced loss in the current year”, with the biggest improvement coming in the second half.
JD Sports acquired Blacks and Millets last year for £20m, pulling the troubled chain out of administration, but has still not managed to return the brand to profitability.
The company said developing profitability was still “a work in progress”.
The outdoor business made a £14.9m operating loss in the year to 9 February, dragging the group’s overall profit before tax down 20.4 per cent to £60.5m. Around 122 outdoor stores closed last year, helping to cut its rent bill and it plans to keep around 60 Millets shops and 80 Blacks stores.
Its fashion lines Bank and Scotts also struggled in the 18 week period, with sales down by five per cent, and it expects losses to widen in the first half of the year.
JD Sports, which also sells clothing and footwear from brands including Nike and Adidas, reported a seven per cent rise in sales in its core sports business.
Shares in JD Sports closed down 7.5p lower at 882.5p.