Nike woes overshadow JD Sports’ record sales

JD Sports said it was “really happy” Nike has a new boss as trouble at the US giant looms over Britain’s “Sneaker King”.

The retailer posted record half-year sales of £5bn for the 26 weeks to August 3, thanks to strong demand for its shoes.

But shares fell when the excellent numbers were overshadowed by a dismal update from Nike, which normally accounts for nearly half of JD’s sales.

Nike told investors that quarterly sales this summer fell 10 percent amid competition from newer brands.

Company veteran Elliott Hill, who started as an intern at Nike in 1988 and retired in 2020, returns as CEO this month to orchestrate a turnaround.

JD boss Regis Schultz said he was confident Hill would help Nike revive its fortunes. “We’re very happy to have him back,” he said.

“It’s nice to have someone from the industry who knows Nike and its products.”

Schultz said in March that shoppers were feeling “fatigue” toward familiar designs as brands like Hoka and ON, advertised by actress Zendaya, grew in popularity.

But yesterday he said: ‘We see Nike coming back. Nike will be fine. Nike is a strong brand. That’s just a matter of time.”

Outgoing Nike boss John Donahoe blamed the lack of innovative ideas on staff working from home.

JD’s Schultz said selling many different brands besides Nike would protect it.

He said demand for sneakers was driving business, but fashion sales in the UK and Europe were hit by bad weather.

UK sales fell 4.6 percent to £1.2bn over the half due to a wet summer, which has also hit operations at Primark and H&M.

Profits fell by almost two-thirds to £126.3m during the period, due to one-off costs such as those related to the acquisition of US rival Hibbett and the closure of its Derby warehouse. The company is still on track to become the fourth UK retailer to surpass the £1 billion annual profit mark.

It said it was sticking to a profit target of £955m to £1.03bn, which would see it join a select club that includes Tesco, M&S and Kingfisher, the only other UK companies whose profits have surpassed £1bn, although Next is also closing at the milestone.