Two of retail’s better performers – JD Sports Fashion and Dunelm – will bring some cheer to the sector this week, but struggling Mothercare will highlight the gulf between the high street’s winners and losers.
Sportswear firm JD Sports Fashion’s recent acquisition of Blacks Leisure for £20 million is likely to dent its full-year profits on Thursday, but the underlying picture remains fit and healthy.
The firm, which operates 350 JD Sports and Size? outlets and bought 290 Blacks and Millets stores after the firm went bust at the end of last year, is forecast to report pre-tax profits of about £72m, compared to £81.6m the previous year.
The City will be looking for more detail on its plans for the Blacks estate, which was bought in a pre-pack administration deal after the outdoor clothing retailer buckled under the pressure of high debts and dire trading.
Blacks employed some 3,500 staff at the time of the acquisition, but many are likely to have been made redundant after JD evaluated the performance of each outlet. JD Sports has capitalised on the difficulties faced by its rival JJB Sports, which nearly went bust last year amid falling trade and mounting debts.
The fellow sportswear retailer, which has secured £30m of funding from investors, including Dick’s Sporting Goods, is currently in the process of closing up to 100 unprofitable stores.
Struggling retailer Mother-care is forecast to reveal a worsening trend in like-for-like sales on Thursday in its last trading update before its new chief executive takes the helm.
The mothers-to-be, babies and children’s goods group has been weighed down by the performance of its 350 UK stores, which have been placed under review.
The chain saw like-for-like sales drop 3 per cent in the UK in the 13 weeks to 7 January and analysts predict this performance will deteriorate to a 10 per cent decline.
However, the group is being propped up by a strong performance overseas, where it has 1,000 stores, with international sales growing 18 per cent in the third quarter and further gains predicted.
The update comes weeks before Simon Calver, the former boss of internet movie rental company Lovefilm, becomes chief executive in an appointment that has signalled the parenting group’s drive to boost its online presence.
Retailer Dunelm is likely to show further inroads into the beleaguered homewares sector when it updates on trading tomorrow.
The group, which has 124 Dunelm Mill stores selling kitchenware, bedding and rugs, recently said sales rose 8.8 per cent to £299.9m in the second half of last year, helped by the addition of a record ten outlets in the period.
Analysts say the group is also competitive on pricing, with current offers seeing discounts of up to 30 per cent across many of its lines.
Dunelm, which started life as a Leicester curtain stall in 1979, plans to have up to 200 stores and has already committed to eight new stores, four of which will open their doors in the first six months of 2012.
Jean Roche, an analyst at Panmure Gordon, expects the group to report that like-for-like sales increased 2.5 per cent in the three months to the end of March.
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