Sports retailer hit by profit warning

The company that owns the JD Sports and First Sport chains has seen its share price tumble by 15% following a profit warning.

The John David Group said profits would be "significantly below market expectations" for the current financial year because of disappointing recent sales.

The group has found it harder than expected to integrate the First Sport chain, which it bought last year from Blacks Leisure.

Like-for-like sales - which ignore the effect of new store openings - were down about 3% across the group during the six months to 31 July.

In early trade the firm's shares were down more than 20%, but they recovered slightly to close at 150.5p, down 15%.

Last week JD Sports was one of 10 firms to be fined by the Office of Fair Trading following an investigation into the price-fixing of replica football shirts.

Under pressure

Despite promising sales over the Easter period, business fell back during May.

During the six months to July, JD Sports stores saw underlying sales dip 0.5% while First Sport sales dropped 6%.

Although the early start to the summer sales saw business pick up, the extra trade was not sufficient to offset the lower profit margins on sale items.

The group said it was continuing with its series of store refurbishments which is seeing the First Sport stores being converted to JD Sports outlets.

So far it has revamped 102 stores and sold off another 15.

No regrets

JD said it had suffered problems where JD Sports and First Sport stores were close together, with sales being 'cannibalised' as the outlets competed for business.

It added there had also been problems with stock levels.

But a spokesman for the group said the firm had no regrets about its purchase of First Sport.

"The view of the chairman is that it was a strategically sound acquisition, they have taken out the number two player in the sports fashion market, they have got over 100 locations where there wasn't previously a JD Sports presence," the spokesman said.