JD Sports Fashion Plc said sluggish innovation at Nike Inc. contributed to a slump in sales at the UK retail chain as consumers look to refresh their wardrobes.
“Nike has been so successful but they just stopped a little bit bringing in new stuff,” said Régis Schultz, JD Sports’ chief executive officer, in a call with reporters Thursday. “At the same time Adidas is doing very well, New Balance is doing very well.”
Shoppers “get bored very quickly,” he said. “If you don’t bring in new stuff, new product, new innovation, new colour, I think the demand is suffering.”
The British retailer is banking on a summer of sports to revive its fortunes, after like-for-like sales in the UK fell 3.1 percent in the final quarter of 2023, according to a statement the same day. Pretax profit for the full year was in line with guidance of between £915 million ($1.16 billion) and £935 million, following a profit warning in January. Shares rose 6 percent.
Weak sales led Nike to announce cost-reduction plans last year, including cutting jobs and simplifying its product lines.
The US sportswear company, which manufactures the popular Air Jordan line of shoes, makes up an estimated half of JD Sports’ sales worldwide, according to a note by Guy Lawson-Johns, equity analyst at Hargreaves Lansdown.
“The future fortunes of JD remain inexplicably linked to Nike’s success,” Lawson-Johns said. “The closeness of its relationship provides the exclusive products and competitive pricing that lures in punters to part with their cash, but it also creates a dependency.”
By Jennifer Creery
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