1st Jul 2021 09:43
(Alliance News) - JD Sports Fashion PLC on Thursday said it will separate its executive chair and chief executive roles, whilst reporting "encouraging" trade since retail reopened.
Shares in JD Sports were trading up 3.5% at 951.00 pence each in London on Thursday morning.
The Manchester-based athletic apparel retailer bowed to shareholder pressure over its corporate governance, agreeing to split its chair and CEO roles. Peter Cowgill has served as both executive chair and CEO of JD Sports, since taking up the latter position in 2014.
Last month, JD had defiantly responded to a media report about the dual role of Cowgill, saying it would not split the CEO role from that of chair.
Turning on Thursday to recent trading, JD Sports said sales in the immediate period after the reopening of non-essential shops in England was encouraging in the UK as both existing and new consumers to the company's product ranges. However, consistent with other retailers, it said, store footfall remains fragile with online traffic at elevated levels.
Elsewhere, the retailer said that federal stimulus money paid directly to individuals in the US boosted consumer demand across all of its businesses. Less positively, temporary store closures remained in parts of the Asia Pacific region.
JD Sports also noted it has completed the EUR16.5 million sale of Sports Unlimited Retail BV to its 50% owned Spanish subsidiary, Iberian Sports Retail Group SL. As it noted early last month, JD Sports will continue to make strategic decisions about the future of Sports Unlimited.
Looking ahead, JD Sports said it is on track to deliver pretax profit before exceptional items for the financial year ending in January 2022 at an increased level of "no less than" GBP550 million. It posted pretax profit before exceptional items of GBP421.3 million in financial 2021.
JD Sports said it will divide the roles of executive chair and CEO before its next annual general meeting and a comprehensive process will commence shortly.
JD Sports is holding its 2021 AGM on Thursday.
The company said the board review will address other governance issues as well.
"We fully accept that the composition of our board should reflect the current scale, momentum and global positioning of the group as well as its increased level of market capitalisation. In addition, the board fully supports the initiatives driven by the Hampton-Alexander Review and the Parker Review and acknowledges the need to create additional diversity within its membership," JD Sports said.
The Hampton-Alexander review focuses on increasing the number of women on FTSE boards. The Parker Review sets FTSE 100 firms a target of appointing one person from an ethnic minority background to their boards by the end of 2021.
"We are also mindful that certain board members have served on the board for longer than the recommended period of tenure within the Corporate Governance Code. The board, therefore, recognises the need to address its composition as soon as possible and have invited the independent non-executive directors to commence the selection process and make recommendations to the Nominations Committee."
By Scarlett Butler; [email protected]
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