Nov 13, 2014
JD Sports seeks cuts in store rents for ailing fashion arm Bank
Nov 13, 2014
LONDON, United Kingdom - UK retailer JD Sports is asking landlords to reduce rents on some of its Bank stores as it seeks to cut costs at its loss-making fashion division.
Executive Chairman Peter Cowgill said it had now approached landlords to seek a switch to turnover-based rents on around 25 of its Bank stores out of a total of just over 80.
"We will do anything we can to improve the performance of the business," Cowgill told Reuters, adding that some landlords could take stores back early in return for help on a rent deal.
Healthy demand for trainers and casual wear at JD Sports' 580-store core sportswear business has driven strong profit growth for the company but the fashion arm, which includes chains such as Scotts and Bank, has failed to match the pace.
The division posted rising operating losses of 8.2 million pounds ($13 million) for the six months to Aug. 2, with Bank, where management has been overhauled, a particular problem.
Despite the bid to boost its under-performing stores, Cowgill said the Bank business had traded "reasonably well" through a difficult start to the autumn season, with warmer weather hitting clothing sales at many British retailers.
Shares in JD were broadly flat at 1505 GMT at 441.8 pence.
1 US dollar = 0.6355 British pounds
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