UK Sports Retailing 2011

14 Jul 2011 • by Natalie Aster

Verdict forecasts that Halfords' share of the bicycle market will decline marginally for the second consecutive year, falling by 0.4 percentage points from its 2009 peak to 26.2%. While the retailer improved its bicycle sales by 8.7% on a like-for-like basis for the 13 weeks to April 1, 2011, a significant factor behind this performance were the weak sales in the previous period caused by the harsh weather conditions at the start of 2010. As well as impending spending cuts which will discourage shoppers from making large discretionary purchases – as they repair rather than replace – it is facing stronger competition. Evans Cycles is expanding aggressively while Tesco can use its economies of scale to undercut on price.

Having seen a 2.4% drop in sales in 2009, the sports goods market recovered in 2010 and will be worth £8.5bn in 2011, a 2.7% rise in sales. The report “UK Sports Retailing 2011” by Verdict examines how retailers are capitalising on this trend, providing sector sizes and forecasts, retailer shares, analysis of key players and an overview of the main market issues, to give you a full understanding of the sector.

The UK sportswear (clothing & footwear) market is set to grow by 3.2% in 2011. The market is receiving a boost from the expansion of non-sports specialist stores. The likes of Debenhams and Next have developed sportswear ranges, dedicating specific areas to their offers.

In March 2011 JJB Sports signed its second CVA, permitting it to close 89 stores over the next two years. As a result of this, there are significant opportunities for other retailers to pick up market share. We estimate that in 2011 there will be £32.5m worth of sales for other retailers to take advantage of, with a further £52.3m in 2012.

The Olympics is set to give the sports market a considerable boost in 2012. Consumers will want to buy items similar to those worn by athletes and are likely to be inspired by new sports having watched the Games, causing sales of equipment to rise.

Report Details:

UK Sports Retailing 2011

Published: Mai 2011

Pages: 158

Price: US$ 3,450.00

Report Sample Abstract

Recent key events

Second CVA accepted

In March 2011 it was announced that JJB Sports' CVA had been accepted by its creditors and shareholders. The CVA will allow the retailer to close 43 stores over the next year, with the option to close a further 46 in the following 12 months. As part of the agreement landlords will accept 55.0% of current rent levels on these stores, but will be in a position to claim back up to £7.5m if JJB Sports is taken over or improves its performance. As the second CVA in two years for the business, it provides another lifeline for the struggling sportswear retailer. The business plans to centre its future plans on revamping stores as well as improving product and service, though realizes it will be difficult.

Fundraising to be spent on retail basics

Shareholders approved JJB Sports' fundraising at its annual general meeting at the end of April 2011. The retailer will spend the net £60.0m on retail basics including remodeling stores, as well as capital programs such as IT and maintenance. Not only will this provide the capital to allow the business to implement its revised business plan, it will also reduce its reliance on the availability of supplier credit by putting the company in a better cash position. It will also allow it to restock stores at least partly. They have been running extremely low on stock.

New appointments

In January 2010 it was announced that Sir David Jones would step down as chairman due to health reasons but would remain as a non-executive director. His executive responsibilities were passed on to Keith Jones when he took up his position as chief executive in March 2010. While Mr Jones had not had any experience in sports retailing specifically, he does have a strong background in retail. He held roles at B&Q and Virgin before spending the past 10 years at DSGi. In September 2010 Kate Hayes was appointed as trading director, having formerly been international retail director at Ben Sherman. Previous to her role at Ben Sherman, she worked as Nike's UK retail director at and then moved on to work at Nike – bringing a strong background in the sportswear market with her. It is reported legal and operations director Richard Manning, who is also the company secretary, will leave the board at the company's annual general meeting in July 2011.

£455,000 Financial Services Authority fine

After failing to disclose full details of its acquisitions of Qube and The Original Shoe Company, JJB Sports was fined £455,000 by the Financial Services Authority (FSA) in January 2011. The fine will be paid in monthly installments over the next six months. It was reported that no further investigations into the company were being made and that any inadequacies in the disclosure of information fell under the previous management team under the former CEO Chris Ronnie.

More information can be found in the report “UK Sports Retailing 2011” by Verdict.

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