Bucking the Economic Trend

Bucking the Economic Trend

J D Sport, who in the last couple of weeks announced exceptionally good results (- profits up 64% in the six months to the end of July) and have been doing so throughout the economic turmoil.

If you were in an industry which is considered by most to be having a hard time – such as construction or some aspects of retailing – you would be forgiven for assuming that nobody would escape the traumas which have beset those sectors. Yet with all the tales of business failures how do some businesses seem to manage to buck the trend?

Take as an example, J D Sport, who in the last couple of weeks announced exceptionally good results (- profits up 64% in the six months to the end of July) and have been doing so throughout the economic turmoil.

So what makes them different? In their case, they have a very good management team, who clearly are constantly undertaking a deep and candid examination of their own operations. They are in a niche, serving younger customer segment, which seems to have been less affected by recession. They have a good merchandise offering and have broadened the mix of products in recent years.

Apart from selling a wide range of strong brands and having a good approach to marketing, there has been other signs of sturdy management. These include:

  • Keeping a tight rein on stock levels
  • Closing under-performing stores
  • Operating the business with very little debt

J D Sport has been acquisitive over the years, starting with 200 First Sport stores from Blacks Leisure in 2002. Subsequently they have snapped up bargains as other companies have fallen by the wayside. This includes 70 stores from the Administrators of Allsports and in 2007, the company bought out Bank Stores.

Positioning a business to be less vulnerable to outside influences does not just happen. It takes a great deal of planning, engineering as well as time. Some companies fail as a consequence of poor management – whilst others are simply victims of unforeseen occurrences.

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