JD Sports’ retail ‘niche’ in Australia now worth $300m in annual sales
JD Sports, the British footwear and apparel retailer, has found success in Australia with its mix of music and sports and hyperactive stores.
Business
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JD Sports chairman Hilton Seskin likes to describe the British footwear and apparel retailer as having found its “niche” in Australia.
Last year JD Sports, the youth focused and ultra-hip chain, saw its sales here rocket more than 60 per cent to $306.28m – the word niche might now be too small to properly describe the retailer’s effervescent growth and the size of its prospective market here.
“We have found our niche, we understand the market demands, particularly in the footwear and apparel space and we have got a lot of exclusivity for JD which means if you it runs out at JD you can’t get it anywhere else, and that creates a hyped-up demand,” Mr Seskin told The Australian.
That hyped-up demand was evident in JD Sports business in Australia for the 12 months to the end of January according to its just-released financial results, with sales at $306.28m from $190.722m for 2020, while profits from its operations across just over 40 stores rocketed more than 300 per cent to $23.31m.
JD Sports burst on to the retail scene with exclusive footwear and apparel brands sprayed across its bricks and mortar stores and online, no doubt taking market share from market leaders such as Rebel Sport and footwear chains Platypus and Hype owned by ASX-listed Accent Group.
“We are growing our network of stores quite rapidly, we have a good runway of stores to open and we just launched in New Zealand and it was a very successful opening in Auckland,” Mr Seskin said.
JD Sports has its eyes now clearly on growth and will open more stores as it races to 50 stores across Australia.
“We would like to open a minimum of 10 new stores but it is not about how many stores we will open but finding the right locations, it is about that we understand the market and just making sure we open just where the opportunities are and, hopefully, be successful,” Mr Seskin said.
Like juggernaut sneakers and fashion chain Culture Kings, the Australian-created retail model recently majority bought by a US retail multinational for $600m, JD Sports has developed a winning retail recipe that combines music and sports with fashion.
“We have regular launches of products, when stores are open and we get hundreds of people queuing up. Why? Because we have got product that was not readily available in their market where they are so I think it is now a global business and we just understand the market and how to address it,” Mr Seskin said.
“Obviously our association with sport and music is really important, sponsorship, and so again a communication with that audience and so far it is paying off.”
Mr Seskin said JD Sports business was now getting synergies and economies of scale in Australia that helped the 60 per cent lift in annual sales to flow down to a 300 per cent gain in its full-year net profit. “We continue to grow and we will continue to invest in the market to reap the rewards,” he said.
“The way we addressed Covid was that people were at home, people were changing their lifestyles slightly and I think it gave us an opportunity to connect with a whole new market so for us we used it to connect to our core customer and we felt we definitely got some growth out of that, we have also grown customers.
“And to us the life of a customer is way more important than just the last sale.”
Turning to supply chain issues, with many businesses and in particular retailers struggling to get stock on time from overseas, Mr Seskin said it continued to be a challenge but so far JD Sports had navigated these challenges well.
“This pandemic has been rough in many ways for everybody in terms of supply chain and factories but so far we have been able to navigate that obviously relatively well and we hope there is not going to be too much more disruption in the market,” he said.
Mr Seskin said as yet he wasn’t seeing inflationary pressures in his sector.
Originally published as JD Sports’ retail ‘niche’ in Australia now worth $300m in annual sales
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