JD Sports Profits Fall Because of Blacks Purchase

Sports fashion retailer JD Sports has announced a sharp fall in profits because of losses at Blacks Leisure, mind which it acquired earlier this year, medical and the cost of moving warehouses.

Pre-tax profits for the six months to 28 July were £2.88m (US$4.67m), down from £20.1m (US$32.6M) a year earlier. However, revenue was up 26 percent at £556m (US$902m).

The retailer had already said that Blacks would lower it profits this year.

JD said it had incurred an initial loss of £10m (US$16.2m) on Blacks, which it bought in January this year, because of a lack of stock and high costs.

Costs from acquisitions last year and from moving across to its new warehouse in Kingsway, Rochdale, also dented profits, it said.

“I stated in April that the recent expansion activity in the group, the relocation of distribution facilities and the resolution of the stock and property issues in the Blacks business would impact results in the short term,” JD executive chairman, Peter Cowgill, said.

“As expected, this has proven to be the case but it does provide the group with a very positive platform for future development.”

Cowgill said the company had increased its presence overseas during the period.{jcomments on}