JD Sports warns shoppers are "nervous" of crowds

JD Sports has said that shoppers remain “nervous” about visiting shopping centres due to the risk of the spread of coronavirus in crowds.

The retailer, which began reopening stores in some countries in April and in England on June 15, said: “Initial footfall has been weaker in malls and shopping centres, particularly in Northern Europe at weekends, as consumers remain nervous about the risks associated with densely occupied enclosed spaces.”

However, the company did say that those who visited stores are more inclined to spend, rather than simply browse. Executive chairman Peter Cowgill said shoppers are avoiding central London and shopping malls, but those who are visiting are there to spend, rather than browse.

JD gave the update as it reported annual results to the City. Revenue in the year to February 1 – before the Covid outbreak hit Europe - increased by 30% to £6.1 billion while pre-tax profits rose 3% to £348.5 million.

Cowgill said: "We were encouraged by the continued positive trading in the early weeks of the year prior to the emergence of COVID-19 and we firmly believe that we are well placed to regain our previous momentum."

Cowgill also took a swipe at the banks over the collapse of Intu, and warned landlords he is prepared to close stores if the retailer doesn’t secure rent cuts.

Shopping centre owner Intu collapsed last month under a near £4.5 billion debt mountain. Peter Cowgill, executive chairman of JD which has stores in centres including Intu Watford, said: “I don’t think Intu itself was doing a lot wrong. If you buy a house for £1m and your mortgage is £950,000 and the value is now £700,000 you are under water.

“Funding institutions have got to recognise that with the new dynamics the value is £700,000 and they are not going to get £950,000. Valuations have got to be realistic.”

Cowgill said he had personally taken on negotiations with landlords and. “Negotiations are constructive. They themselves are in a difficult position because of the way they are funded. We are seeking compromises. My ethos is I do not want to pay today or tomorrow’s rent with yesterday’s income. If there is no footfall there is a reduced level of income. If we do not get realistic rents we will close stores.”

JD Sports opened 309 stores on June 15 when on-essential stores were allowed to reopen, although changing rooms remain closed and returned stock has been separated fro new or old stock for 72 hours to reduce the risk of coronavirus transmission.

The retailer introduced a host of other distancing measures, including capping the number of shoppers in store and protective screens at tills.

Richard Hunter, head of markets at Interactive Investor, said: “JD Sports’ meteoric rise may have come to a grinding halt as a result of the pandemic, but its attractions remain in light of its plans for further expansion."