JD Sports' Oracle system roll-out on track

Sport and fashion retail group JD Sports announced this week that it is making satisfactory progress in replacing its legacy bespoke commercial systems with Oracle Retail.

During a half-year results statement, which showed its sports business continuing to perform well but losses reported in its fashion and outdoor divisions, the company's executive chairman Peter Cowgill said that the business remains on track to bring the first of the group's businesses on to the new system in 2014.

JD Sports' retail businesses will be transferred in stages, with all current UK retail and JD fascia businesses expected to be operating on the Oracle system by autumn 2015.

Sarah Taylor, senior industry director, EMEA & JAPAC, at Oracle Retail, said: "Oracle is proud to partner with JD Sports in the support of their international growth strategy and in the provision of Commerce Anywhere.

"The systems transformation, through the implementation of Oracle Retail Merchandise Operations Management and Planning applications, will support the business during an exciting period of expansion into new markets."

Half-year pre-tax profit at JD Sports doubled year on year from £2.9 million to £6.1 million, with sales up 2% from £556 million to £567 million. The boost to the bottom line was driven by strong sales in JD Sports stores, as like-for-like sales in the UK and Ireland jumped 7.5%, but its outdoor and fashion brands including Millets and Scotts were loss-making.

Much of the last six months has been taken up with reorganising the Blacks and Millets businesses that JD Sports bought out of administration last year, and the group indicated that these have now been set-up with a lower cost base and are moving towards having a platform for profitability.

Surprisingly for a leading UK retailer there was limited reference to multichannel development, past or future. With eCommerce, mCommerce and in-store technology becoming increasingly important in the consumer retail experience, these may be areas that JD Sports will look to direct its investment in the future.

Providing analysis of the last six months of trading, Nick Hood, business risk analyst at financial health monitoring specialists Company Watch, told Essential Retail: "These results are much more about finally seeing some sort of turnaround with the Blacks and Millets brands after 18 months of management effort, than they are about JD Sports itself. Pundits have quite rightly been questioning the wisdom of the January 2012 acquisition and the major management distraction it has turned out to be.

"The good news is that alongside much needed progress with the outdoor brands, the original sports offering is coming good too, with major gains on the key performance measures of operating profit and like-for-like sales. This is a strong company with a healthy balance sheet, little debt and strong working capital resources including substantial cash reserves."

Estimating what the future may hold for JD Sports, Hood added: "The demise of JJB Sports has undoubtedly helped, but this firm financial base will be invaluable in the continuing battle with Sports Direct in a highly competitive market, especially in funding the investment which will be needed to grasp the multichannel retailing revolution and exploit it.

"This is not something that can be ignored, nor are there risk free solutions to the challenges it represents."