By James Davie
LONDON (Reuters) – British sports and fashion retailer JD Sports, one of Nike Inc’s biggest clients, gave a vote of confidence in the world’s biggest sports brand by sales on Tuesday, with senior executives saying it “will be fine”.
Nike shares plummeted late last month after the company warned that sales would fall this year due to sluggish demand for its sneakers as consumers flock to newer brands such as On and Hoka.
But Mike Armstrong, global managing director of FTSE 100-listed JD Sports, said it would be a mistake to give up on Nike’s future.
“Anyone who is giving up on Nike needs to look at Nike’s history in the market over the last 30, 40 years. Nike is fine,” he told reporters at JD’s recently refurbished flagship store in London’s Westfield Stratford City.
JD also sells sports brands such as Adidas, On, and Hoka.
“Over the years, there have always been challenger brands. That’s the nature of the industry we’re in. There’s always newcomers, always entrants,” Armstrong said.
JD’s shares have fallen 22% so far this year, hit by a profit downgrade in January and weak first-quarter trading on the domestic market.
Armstrong declined to comment on the current deal ahead of a planned update next month.
JD sees the Stratford store, its highest-selling store in its portfolio of more than 3,400 stores in 38 countries, as a blueprint for opening larger stores globally.
Features include an inventory of 30,000 boxes of shoes, a semi-automated conveyor system that can transport a box of shoes from the warehouse to the work area in under 30 seconds, more than 205 square metres of LED panels and handheld devices for all workers.
So far, about 70 JD stores around the world have adopted the same concept as Stratford, with the number expected to reach nearly 200 by the end of the year.
Last year, CEO Regis Schultz said JD planned to spend up to 3 billion pounds ($3.9 billion) to open up to 1,750 stores over five years.
(1 dollar = 0.7792 pounds)
(Reporting by James Davey and Mark Potter Editing)
