Sports Direct is planning a further shake-up of its 3.9m sq ft store portfolio as it looks to reposition itself in a tough market.
The retailer said its lease expiry profile over all core stores – excluding Lillywhites Piccadilly – is now just 6.8 years, allowing “a huge amount of flexibility… to meet the difficulties of the current marketplace and the challenge from online”.
Announcing its preliminary results for the year to 29 April, Sports Direct said its portfolio had grown by 100,000 sq ft since 2011. During the year it refurbished 21 stores and relocated eight.
Its portfolio will likely remain neutral over the coming year with its plans to open and close an equal number of stores. Of the 20 new stores planned, 10 will be relocations and 10 will be in new areas.
It has opened eight stores in the first quarter, including two relocations, and it has closed six stores.
Rent reviews with an average increase of 1.7% were agreed across 42 stores in the 12 months to 29 April. Some 52 rent reviews are outstanding, 34 of which fall due in 2012-13.
Following a recommendation by the group’s board, it purchased a portfolio of 32 properties from major shareholder Mike Ashley in April 2012 at a cost of £86.8m.
Pretax profits were up 24.5% to £148m on revenues up 13% to £1.8bn.
Chief executive Dave Forsey said: “We achieved record revenues and growth across all divisions.
“Our colleagues have worked hard during the year and, as a result, we have exceeded the first underlying EBITDA target of £215m (before the charge for the bonus share scheme) and the ‘super stretch’ target of £225m.
“Trading since the period end has remained in line with management’s expectations where increased investment in margin has been funded by stronger retail sales. In spite of the low expectations surrounding England’s participation in Euro 2012 and the unseasonal weather, our core divisions are performing well. Excitement is building towards the Olympics and we continue to target our 2013 ‘super stretch’ underlying EBITDA objective of £270m (before the charge for the bonus share schemes).
“We are very excited about the London Olympics that begin next week and we wish all Great Britain’s athletes the very best of luck.”
jack.sidders@estatesgazette.com
