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Does JD Stand for Getting the Job Done in Athletic Apparel?

JD Sports Fashion has managed to build a multi-brand platform targeting consumers at the intersection of, as its name suggests, sports and fashion.  With Athletic Apparel more generally benefitting from work-at-home trends, what have been the drivers of JD’s performance?  In today’s Insight Flash, we examine subindustry performance in both the US and UK, trends for individual JD brands, and which competitors are most likely to be cross-shopped.

In the US, Footwear/Athletic Apparel has shown strong growth over the last three months on a one-year, two-year, and three-year basis.  The lift from remote work and quarantine trends has led to 46% spend growth versus three years ago.  That hasn’t been the only factor, with growth versus last year still strong at 12%.  In the UK, trends have been more moderate, with double-digit subindustry growth on a two-year and three-year basis, but weakness versus last year.

Subindustry Spend Growth

Note:  US data for the 91 days ending 8/24/22, UK data for the 91 days ending 8/21/22.

A defining feature of JD’s strategy has been its multibrand portfolio targeting different customer segments.  The company was recently forced by the UK Competition and Markets Authority to divest Footasylum, which has historically represented 7-10% of spend for the company in the UK.  The loss of Footasylum is likely to hit most heavily in calendar Q4 where it tended to have peaks in share of spend, offsetting weakness from recently restructured Go Outdoors.  Although the flagship JD Sports brand has recently represented a smaller share of sales for the parent company, it remains above half of UK credit/debit card spend.

UK Brand Share

Note: “Other Brands” accounts for the remainder of M&A-adjusted company total spend, with acquired brand spend only included after acquisition date

For a company with such a diverse portfolio, JD’s cross-shop could indicate either competitive threats or potential new acquisition targets (of the specific businesses or smaller merchants with similar positioning).  In the UK, in the last three months one third of JD Sports brand customers have also shopped at Sports Direct, with high cross-shop at footwear brands’ direct-to-consumer channels as well.  About 6% of shoppers also purchased from Footasylum, with the commonality suggesting JD may find ways to keep some of that spend after the divestiture since they already have those customers buying from the JD Sports brand.  For the company’s US business, cross-shop is also high with brands’ direct-to-consumer channels, with Foot Locker as the highest multibrand cross-shop.

Cross-Shop

Note:  Direct-to-consumer spend only