Athleisure affords JD Sports greater protection from COVID-19

Following today’s release of JD Sports FY figures for 2019/20,

Emily Salter, Retail Analyst at GlobalData, a leading data and analytics company, comments:

‘‘Following another strong year in FY2019/20 delivering results that other clothing players would envy, JD Sports now has plenty of problems on its plate trying to make a success of recently bought back Go Outdoors and appealing the CMA’s decision on Footasylum, all whilst weathering the COVID-19 storm. The retailer’s revenue reached £6,110.8m in FY2019/20, boosted by its first full year since acquiring Finish Line in the US, though growth will have slowed significantly as the impacts of COVID-19 hit.

JD Sports is well positioned to navigate the crisis as its sports fashion brands, which made up 93.2% of total revenue in the period, are more protected due to their focus on athleisure and core customer base of loyal, young shoppers. These consumers are more likely to have spent on clothing & footwear during lockdown, and are the most enthusiastic to return to shops, with 69.7% of 16-24s feeling comfortable to return, according to GlobalData’s survey of 2,000 nationally representative UK consumers in June. 

The COVID-19 outbreak has hit its already struggling outdoor fasicas the hardest – sales fell by 1.8% in the period, and Go Outdoors in particular was left exposed by a high reliance on store sales (historically over 90% of revenue), with the brand falling into administration in June. The retailer must decrease the brand’s reliance on physical stores to ensure its future viability as the COVID-19 crisis has accelerated the shift of spend to online, and permanent store closures are highly likely. JD Sports in particular has long recognised the growing importance of the online channel, introducing initiatives to capitalise on this such as Klarna and JDX, its loyalty scheme. This is especially important to protect shopper loyalty as key brands such as Nike and Adidas increasingly prioritise their direct to consumer channels.

The retailer has been wise to expand its presence internationally to reduce its reliance on Western Europe, opening stores in Europe, APAC and the US during the period. However, these openings will be extremely impacted by COVID-19 in the US and Europe due to constrained footfall, especially in shopping centres, and will continue to be affected throughout 2020 due to economic uncertainty. JD must ensure that it grows its online sales in these countries to mitigate low footfall, using its stores to promote brand awareness.”

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