Tiso owner JD Sports set to play hardball with landlords

The boss of JD Sports, the retail giant that has a ­controlling stake in ­Scottish outdoor retailer Tiso, has hinted that any investment in the company’s shops will be dependent on potential negotiations with landlords as customers gingerly start returning.

JD has been one of most successful names on the British high street in recent years. Picture: Nick Ansell/PA Wire

Peter Cowgill said his team is encouraged by trading as the firm emerges from months of lockdown across most of its markets, but warned landlords not to be intransigent.

“Looking longer term, there is inevitably considerable uncertainty as to what the effect of Covid-19 will be on consumer behaviour and footfall, with future store investments highly dependent on rental realism and lease flexibility,” he said.

The business said that since shops started to reopen, customers have been nervous about returning to densely occupied enclosed spaces such as shopping centres.

Initial footfall since stores started opening has been weaker, with Northern Europe particularly badly hit at weekends.

By 23 March, JD Sports had closed 98 per cent of its physical stores across the 14 countries where it operates. But online trading continued and had been resilient, the firm noted.

It came as the business reported record figures for the year ending 1 February – just as the coronavirus was starting to emerge in Europe. Pre-tax profit was up 3 per cent to 348.5 million, on revenue of £6.1 billion, a 30 per cent rise.

The group, which recently bought back the Go Outdoors chain from administration in a pre-pack deal, opened 52 more shops in mainland Europe than it closed over the year. In Asia-Pacific the number of stores it runs increased by 18.

“Whilst Covid-19 has constrained our short-term progress, it is important that we do not lose sight of the core retail standards and commercial disciplines which have underpinned our longer term growth to date,” Cowgill added.

“JD has a market-leading multi-channel proposition which maximises its consumer relevance and reach by creating, and then maintaining, a deep emotional connection with its consumers who see JD as an authoritative and trustworthy source of style and fashion inspiration with influences drawn from both sport and music.”

He added: “We were encouraged by the continued positive trading in the early weeks of the year prior to the emergence of Covid-19 and we firmly believe that we are well placed to regain our previous momentum.”

John Moore, senior investment manager at Brewin Dolphin, said: “JD’s results cover the 52 weeks to 1 February, which makes it difficult to determine the effect of the Covid-19 pandemic on the business.

“We do know, however, that it went into the crisis in solid shape on the back of record results. JD’s success has been built on a strong connection to the customer and good customer experience across a blend of online with bricks and mortar retail – the role the latter plays is likely to change significantly, with references to the need for greater ‘flexibility’ over leases notable in today’s statement.

“JD appears to be in a strong position to invest in its business – particularly compared to many other retailers.”

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