Sports Direct numbers buck retailers' downward trend

11 April 2012

Sports Direct showed today that it is defying the gloom on the High Street, with another leap in sales and confirmation that it plans to repeat a bonus scheme for staff.

With next door neighbours such as Mothercare and Dixons reporting profit warnings amidst declining consumer confidence, the leisurewear specialist is on a roll.

In the nine weeks to the end of March sales were up 10.3% to £236 million. Margins also seem to be protected - profits are up 7.3% to £88 million.

All of which is encouraging Sports Direct to extend a share bonus scheme for its 2500 staff. If certain targets are met, staff see 75% of their salary converted into shares priced at 125p.

That's a significant benefit, given that the shares were today up 0.1p at 199p.

Chief executive Dave Forsey said: "The board believes that the bonus share scheme has been a significant contributor to our success. It is our intention to extend the scheme for 2012 and 2013 and beyond incorporating more aggressive targets."

Sports Direct was founded in 1982 by Mike Ashley, whose empire now includes Newcastle United Football Club. He floated the business on the stock market in 2007 at a price of 300p, crystalising a near £1 billion fortune. The shares subsequently collapsed as low as 60p, allowing Ashley to buy back some shares. He owns 72% of the stock.

The company has been investigated by the Serious Fraud Office more than once, with no charges brought.

Sports Direct issued a slightly curious statement to the Stock Exchange yesterday noting that regulators have raided Adidas' Japanese arm amid suggestions the company was pressuring retailers not to discount Reebok EasyTone shoes. Sports Direct noted that "Should the issue arise in the UK... [it] would not face any risk of sanction".

It doesn't sell the shoes, presently stocked over here by archrival JJB, but it would clearly like to.

Retail analysts took the statement as a sign of its frustration that Adidas won't do a deal with it on EasyTone, worn by Kelly Brook among others.