JJB football strip sales surge even with World Cup failure

SPORTSWEAR chain JJB enjoyed a rise in sales despite the England team's early departure from the World Cup last month following a 4-1 defeat by Germany in the knock-out stages.

The retailer, which has traditionally relied heavily on the sale of replica strips for major football tournaments, racked up a like-for-like sales increase of 22.3 per cent for the six weeks to 4 July, compared to a year earlier.

The group has seen steady growth after a series of recent management and strategy overhauls. Its sales rebound will come as welcome news after a turbulent four years for JJB. It recently faced administration - a threat narrowly staved off after a 100 million rescue deal with its landlords.

The Wigan-based group, which runs more than 250 stores in the UK, including some 40 in Scotland, has attempted to move away from its traditional market and widen its scope to all other major sports to reduce dependence on the major soccer events. As part of its revamp, the chain is investing in its store network along with its website in a bid to retake pole position in the 5?billion-plus sportswear market.

A new model store in Slough - where an investor presentation was held yesterday - will be the basis for JJB's new "Serious about Sports" image. This layout will be rolled out to four more stores this autumn afterevaluation, with scope for further expansion at a later stage, JJB added.

In its short trading period, the newly-refitted Slough store has boasted a 9 per cent sales increase and 17 per cent profit gain on the JJB average.

City analysts held conflicting views following the latest trading update.

Freddie George, an analyst at Seymour Pierce, said "We have yet to be convinced about the 'Serious about Sports' strategy in an increasingly competitive environment.

"The stock has almost halved in value since the final results announcement at the end of May. We currently have a sell recommendation on it."

Numis, however, maintained a "Buy" recommendation on JJB's shares. Matthew McEachran, an analyst with Singer Capital Markets, said the update suggested JJB "made a much-needed profit in June".

But he stressed: "The summer sale has only just commenced and it remains to be seen whether the stock that needs to be cleared can be sold without undoing the next margin progress - in other words there are still a number of risks relating to the turnaround."

The figures come in spite of JJB's summer clearance sale starting on 1 July, 10 days later than in the previous year.

In May, the group warned that its recovery would be neither quick nor easy, as full-year pre-tax losses tripled, reflecting a haemorrhaging of sales through 2009.

JJB suffered an underlying pre-tax loss of 68.5m in the year to 31 January, compared with forecasts for a loss of 63m-69m and after a 21.8m deficit in 2008-09.

Revenue slumped 42 per cent to 372.5m after suppliers, fearful of the company's future, held back new stock.