Sports Direct steps up sales growth


sports direct

Mike Ashley's sportswear empire posted a 21% jump in retail sales as his grip on the market strengthened in the wake of rival JJB's collapse.

Sports Direct, which is controlled by Newcastle United owner Mr Ashley, racked up £495.8 million in sales from its revamped online operation and estate of some 400 stores in the 13 weeks to January 27, helping the division's gross profits rise 23% to £203.7 million.

The figures exclude the 20 stores bought from the administrator of JJB, although analysts said there was no doubt the chain benefited from last autumn's collapse of one of the group's big competitors.

Shares rose another 4% in a weak overall market.

Anusha Couttigane, an analyst at consultancy Conlumino, said: "As rivals within the sports sector have dropped off the high street, it seems Sports Direct has hurdled through the recession to become the chief beneficiary of Britain's galvanised interest in the activity." She added that the chain also deserved credit for being prepared to adapt its offer to recessional demands.

The company said it was "certain" to meet its earnings target for the year to April of £270 million, which is the latest benchmark on a staff bonus scheme that recently delivered a £15,000 shares windfall to 1,750 workers.

Its brands division, which includes Slazenger, Donnay and Karrimor, increased revenues by 4.4% to £47 million, helping its profits lift 6.7% to £20.7 million.

Sports Direct is currently looking to resurrect a bonus scheme that could trigger a multimillion-pound bonus for Mr Ashley. A previous scheme which would have delivered a £26 million windfall was rejected in a shareholder vote last summer but Sports Direct is reviewing feedback and will suggest another scheme to incentivise Mr Ashley.

However, in doing so it said it will increase the earnings target for the next two financial years by £20 million, to £360 million in the 2015 year.

The executive deputy chairman netted £929 million in a single day in February 2007 after selling 43% of the business he founded.

© 2013 Press Association