Olympic boom fuels sales lift at Sports Direct

 
City A.M. Reporter
BRITAIN’S biggest sporting goods retailer Sports Direct yesterday reported an 18 per cent rise in recent sales as customers caught London Olympics fever and kitted out children for a return to school.

The group, which owns Sports Direct.com and Lillywhites stores as well as brands such as Slazenger, Lonsdale and Dunlop, said yesterday group total sales in the nine weeks to 30 September had risen to £402.7m, up from £341.3m a year ago.

Gross profit in the period rose 21.7 per cent to £167.4m, with the firm adding that trading since September had remained strong.

Sports retail sales grew 16.8 per cent to £344.7m.

Retailers across Britain are generally struggling as consumers’ disposable incomes are squeezed by rising prices, muted wages

growth and government austerity measures.

Sports Direct has, however, coped well, benefiting from the woes of its rivals, its value offer, a growing internet presence, highly motivated staff due to a lucrative bonus scheme and European expansion.

In October the firm bought 20 stores and nearly all the stock of rival JJB Sports after it fell into administration and closed the bulk of its stores, axing 2,200 jobs in the process.

The group is targeting for 2012-13 underlying earnings before interest, tax, depreciation and amortisation (Ebitda) of £270m, before a charge for bonus share schemes.

Shares in the firm, controlled by billionaire Newcastle United soccer club owner Mike Ashley, closed 1.3 per cent lower at 398.9p yesterday.

However the shares are still up 74 per cent on a year ago, valuing the business at around £2.5bn.

The shares floated at 300p in 2007.