JD Sport Chairman: How to Be a Recession Buster

On 8 April, sportswear and fashion retailer JD Sport published the latest in a series of positive sales figures. Like-for-like sales for the 52 weeks to 31 January grew by 3.9 per cent for the company. No mean feat when the sector as a whole has levelled out. I spoke to Executive chairman Peter Cowgill about his recipe for success.

JG: What is it about your business model that has allowed you to grow in such a tough climate?
PC: There's no precise formula. We are in the right place for aspirational consumers to shop. We are a mature chain in a competitive market and we operate to a stringent one-year budget. A big part of our success comes down to good housekeeping really.

Is there anything about your customers that made them resilient to the consumer downturn?
Our typical customer is between 15 to 30 years old. They are brand savvy and they are keen to keep up with the trends.
They are more immune to the current economic climate than others because they tend to be people with no mortgage or a low mortgage overhead. The younger segment of our market, the 15 to 18 years bracket is particularly dependent on their parents for spending power though.
It's also been about JD Sports growing its market share. Through acquisition, the company has broadened it's range purely from sportswear and this has given us a greater profile in the market.

How has your offering has changed?
In the UK, we acquired Bank and Scotts in an attempt to compete in the fashion market. There are synergies there with our established business, because we've gone into branded fashion. Whereas JD Sports is in a relatively mature market, these acquisitions have given us more property opportunities.

Was it a big leap to move into fashion? JD Sports operates on a branded model, so the business expertise to move into branded fashion was already within the company. It wasn't difficult for us to move into this new area of retail. It means that as a company we've been able to differentiate ourselves as a bridge between sportswear and fashion. With the fashion brands, we are operating in the same space as other retailers who offer non-branded fashion.

How has your management culture contributed to your success? We have a small, light board that meets to tackle key corporate governance issues. Under that is an operational management board of key executives that meets once a month or once a quarter, depending on the impact of departmental issues as they arise.

Is that informal, small scale approach filtered down to regional and store level?
We like to think we don't stand on ceremony and that regional and store managers have access to the operational management board if they need it. That may be inhibited by their reluctance to take up that opportunity, which in delegation terms may not be a bad thing. We can't have 400 managers on the phone all the time.