Nike’s troubles overshadow record sales at JD Sports

JD Sports said it was “really happy” that Nike had a new boss as the US giant’s troubles hung over the British “sneaker king”.

Thanks to strong demand for shoes, the retailer reported record half-year sales of £5 billion in the 26 weeks to 3 August.

Shares fell, however, as the surprising data was overshadowed by Nike’s dismal update, which typically accounts for almost half of JD’s sales.

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

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

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

“It’s good to have someone in the industry who knows Nike and the products.”

In March, Schultz said shoppers were feeling “design fatigue” as brands like Hoka and ON – endorsed by actress Zendaya – gain popularity.

But yesterday he said: “We see Nike coming back. Nike will be fine. Nike is a strong brand. It’s only a matter of time.

Outgoing Nike CEO John Donahoe blamed employees working from home for the lack of innovative ideas.

JD’s Schultz said selling multiple brands, as well as Nike, would protect it.

Demand for sneakers was said to be boosting business, but clothing sales in the UK and Europe were hit by poor weather.

UK sales fell 4.6 per cent to £1.2 billion in the half year due to a wet summer which also weakened sales at Primark and H&M.

Profits fell by almost two-thirds to £126.3m in the period, due to one-off costs such as those related to the takeover of US rival Hibbett and the closure of its Derby warehouse. The company remains on track to become the fourth UK retailer to achieve an annual profit of around £1 billion.

It said it was sticking to its profit target of £955-1.03 billion, joining a select club that includes Tesco, M&S and Kingfisher, the only other UK companies with profits above £1 billion, although Next is also closing on the milestone .