Mike Ashley’s Sports Direct company reported a 21% increase in retail sales, and as expected his market share of the sports retail business increased, after rival JJB’s financial collapse last year.
Mike Ashley – no wonder he’s smiling
Sports Direct reported revenues of £589.5M in the quarter to January 27th, from its revamped online operation and some 400 retail stores around the country, and the Sports Direct profits were up to £244.8M, which is an increase of 23%.
That’s a really big profit margin for a retail company, and those figures do not include the 20 stores of JJB bought from the administrator, when JJB went into bankruptcy last year.
Anusha Couttigane is an analyst at consultancy Conlumino, and she had this to say about yesterday’s results – which were expected to be good:
“As rivals within the sports sector have dropped off the high street, it seems Sports Direct has hurdled through the recession to become the chief beneficiary of Britain’s galvanized interest in the activity.”
For its part the Sports Direct company executives said it was certain to meet its earnings target for the year to April of £270M (for the next quarter), and that is a target that will pay out staff bonuses if reached.
That same bonus scheme recently gave out £15,000 in shares to a total of 1,750 Sports Direct workers.
Peter Saville is a Partner at the advisory and restructuring firm of Zolfo Cooper, and he had this to say about the results:
“Mike Ashley continues to prove himself as one of Britain’s high street heroes, having mastered the latest consumer trends in time to reap the benefits.” “At a time when many retail employees fear for their jobs, Sports Direct staff are enjoying a generous benefit scheme.”
“If rumors of Ashley’s plans to expand into different areas of the high street are true, other retailers may soon find themselves in the shadow of Sports Direct’s founder.”
The Brands Division of the company – which includes brands like Slazenger, Donnay and Karrimor – increased revenues by 4.4% to £47M, and its profits rose 6.7% to £20.7M.
Mike Ashley is also the owner of Newcastle United – and it was a good day for Mike yesterday as Newcastle won 1-0 in Metalist Kharkiv in the Ukraine – and the Magpies go through to the last 16 of the Europa League.
Marc Gillham is from Durham and is at Hull University studying business and marketing. He is engaged in a project to help non-league clubs make decisions regarding sponsorship. Please help Marc with his research by filling out this questionnaire – thanks.
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