For several years now the Sports Direct chain founded by Newcastle United owner Mike Ashley has been a dominant force in the British retail industry, with a raft of high street openings and numerous brand acquisitions propelling it to massive success. Yet despite concerns by industry experts that the sportswear chain’s star would wane as the economy began to take a turn for the better, it appears that it is only going from strength to strength.
In the year to the 17th of April, the retailer noted a record breaking 15 per cent leap in annual pre-tax profits, with the resulting £239.5 million sum leaving the brand comfortably well ahead of its ever-diminishing number of rivals. Furthermore, group sales climbed by 23.8 per cent to £2.7 billion, a marked increase from the £2.1 billion recorded during the previous financial year.
Sports Direct chief executive, Dave Forsey, praised the management team’s strategy for increasing sales in a statement earlier this week.
He said; “We have delivered another record year of out-performance, especially within our Sports Retail division.
“This success is underpinned by our core strategy, offering our customers a wide range of products which represent exceptional quality and unbeatable value.
“Overall trading since the year end has been in line with management’s expectations, with some stronger weeks offset by England’s disappointing World Cup matches.”
Sports Direct also managed to defy the current trend within the retail industry for the financial year just ended, in which clothing retailers continued to struggle as consumers chose to splash out on big ticket home ware items instead. Like for like sales, which exclude the impact of new store openings, rose by an impressive 10.5 per cent, with its network of 400 UK stores seeing a marked rise in footfall.
As operations within the UK remain extremely comfortable, Sports Direct is now able to turn its attention to its overseas markets. The retailer, in the past few months, has acquired both the Ebyl and Sports Experts chains in Austria and also the Baltic region’s Sportland International Group – all three of these acquisitions are now in the process of implementing large scale expansion plans.
Furthermore, the retailer is also furthering its reach in the Australasian market, with three flagship stores set to open in Australia later this year. Additionally, it intends to open its first New Zealand flagship, marking a determined foray into one of its weaker markets.
Online sales are now becoming an important part of Sports Direct’s annual income, as according to directors the 26.8 per cent rise in sales volume during the financial year means online activity now accounts for 17.1 per cent of total group sales.
As Sports Direct has recently acquired a 4.8 per cent stake in MySale for £15 million, it can be presumed that utilising online reach will form a huge part of the group’s overseas expansion plans – something which, if successful, could propel the group into not only domestic but international dominance in the sports retailing sector.
