(Reuters) - Britain’s JD Sports Fashion (JD.L) plans to look overseas for further growth after bucking a gloomy UK retail sector by boosting annual profit by a quarter.
“Because of the saturation in the UK (sportswear) market, the main focus would be overseas development”, Executive Chairman Peter Cowgill said in an interview on Tuesday.
He was speaking after the company posted a 25.5 percent rise in annual profit before tax and exceptional items as demand for tracksuits and trainers remained strong.
Shares in the company rose as much as 7.9 percent as the markets cheered a rare bright spot among troubled British clothing retailers.
Analysts at brokerage Peel Hunt lauded JD Sport’s performance as a ‘stand-out effort’ at a tough time for the industry and the consumer as competition grows online and Britons face pressure on their spending power.
“These are revolutionary times in the industry and its hard to find a sports retailer playing its cards as well as JD” Peel Hunt added in the note. The brokerage has a “buy” rating on the stock.
JD Sports has overtaken billionaire Mike Ashley’s Sports Direct (SPD.L) as Britain’s leading sportswear retailer by market value.
It has already begun to spread its wings beyond its home British market.
It has agreed a $558 million deal for NASDAQ-listed Finish Line FINL.O to tap into the lucrative U.S. sportswear market and is expanding into South Korean market via a joint venture.
JD Sport’s deal for Finish Line, the exclusive retailer of athletic shoes for Macy’s (M.N), will increase the British company’s importance to international brands, particularly Nike (NKE.N) and Adidas (ADSGn.DE).
In Britain, it sell brands such as Superdry, Nike, The North Face and Adidas at its JD stores. The company also offers a number of exclusive items from Nike and Adidas under the “Only At JD” range.
With steady demand at its home UK market fuelling its overseas expansion, JD Sports has also tapped into markets in France, Spain, Finland and Malaysia in the recent years.
($1 = 0.6968 pounds)
Reporting by Rahul B in Bengaluru; Editing by Amrutha Gayathri/Keith Weir