Sports Direct is the UK’s leading sports retailer by revenue and operating profit, and the owner of a significant number of internationally recognised sports and leisure brands. As at 27 April 2008 the Group operated out of 375 stores in the United Kingdom (excluding Northern Ireland). The majority of stores trade under the Sports Direct or Sports World fascias, and the Sports Direct fascia will be applied to all the Sports World stores over time. The Group has acquired a number of retail businesses over the past few years, and some stores still trade under the Lillywhites, McGurk, Exsports, Gilesports and Hargreaves fascias. Field & Trek stores trade under their own fascia.
The Group’s UK stores (other than Field & Trek) supply a wide range of competitively priced sports and leisure equipment, clothing, footwear and accessories, under a mix of Group owned brands, such as Dunlop, Slazenger and Lonsdale, licensed in brands such as Umbro, and well known third party brands including adidas, Nike, Reebok and Puma. A significant proportion of the revenue in the stores is derived from the sale of the Group owned and licensed in branded products, which allows the retail business to generate higher margins, whilst at the same time differentiating the Group’s stores from its competitors, both in terms of the range of products on sale and the competitive prices at which they are offered.
During the year the Group acquired the Field & Trek chain of stores in the UK. As at 27 April 2008 16 stores operated under the Field & Trek fascia, selling a wide range of camping and outdoor equipment, waterproof clothing and footwear, including leading brands such as The North Face, Berghaus, Merrell and Salomon. The acquisition of Field & Trek gave the Group an entry into the outdoor market, which had been identified as a strategic opportunity for the Group. Sports Direct also operates a number of stores outside the UK. As at 27 April 2008 the Group had 39 stores in Belgium, 14 in Slovenia, 4 in Holland and 1 in Luxembourg. In addition, through its 42.5% shareholding in Heatons, the Group had 6 stores in Northern Ireland and 15 in the Republic of Ireland.
Sports Direct has a strategic alliance with the ITAT Group in China. ITAT is the largest network of multibrand apparel retailers in China, and under the agreement the Group supplies merchandise under some of the Group’s owned brands for sale in a “shop in a shop” in the larger ITAT stores.
The Group’s portfolio of sports and leisure brands includes Dunlop, Slazenger, Kangol, Karrimor, Lonsdale, Everlast and Antigua. As previously mentioned the Group’s Retail division sells products under these Group brands in its stores, and the Brands division exploits the brands through its wholesale and licensing businesses. The Brands division wholesale business sells the brands’ core products, such as Dunlop tennis rackets and Slazenger tennis balls, to wholesale customers throughout the world, obtaining far wider distribution for these products than would be the case if their sale was restricted to Group stores. The wholesale business also wholesales childrenswear and other clothing. The licensing business licenses third parties to apply Group owned brands to non-core products manufactured and distributed by those third parties, and third parties are currently licensed in different product areas in over 100 countries. The Brands division is closely involved in the development of licensed products and monitors licensees and their manufacturers to ensure product quality and presentation and consistency with the appropriate brand strategy.
The brands division continues to sponsor leading sports men and women. Amongst them Kelly Pavlik who is the WBC and WBO middleweight champion is sponsored by Everlast; Jamie Murray won last year’s mixed doubles at the Wimbledon championships with a Dunlop racket, and Slazenger sponsors Paul Collingwood, the England one-day International cricket captain. Slazenger completed its 106th year of sponsorship of the Wimbledon championships and continues to sponsor the England women’s hockey team.
As part of the Brands division licensing activities, Retail Corp., a Dubai-based company will, during the 25 year term of the agreement, open Lillywhites and Sports Direct stores in the Middle East and South Africa. Stores have already been opened under this agreement in South Africa and Dubai.
The Group holds a number of strategic investments in other companies, including 29.9% of Blacks Leisure Group and 13.42% of JD Sports Group. These and other stakes are held for investment purposes. The Group continually reviews the value and size of its investments and the rationale for them, and continues to consider further strategic investments in the UK and overseas.