- JD Sports launches loyalty scheme with Nike
- Shares down year-to-date amid bleak retail outlook
- Nike reports steep inventory rise
Shares in JD Sports Fashion (JD.) ticked up 2% to 102p after the self-styled ‘King of Trainers’ extended its ties to sportswear titan Nike (NKE:NYSE) by becoming the first European retail partner for the US sportswear titan’s ‘Connected Partnership’ loyalty programme.
Now live in the UK on the JD mobile app and with expansion planned across ‘key EMEA countries and stores’, JD Sports said the loyalty scheme offers its domestic customers ‘unprecedented’ access to select Nike member-only footwear and clothing once they link their JD and Nike Membership accounts through the app.
Investors were also excited by the fact the partnership with Nike, the American company famed for its iconic swoosh logo, will allow both businesses to share their digital expertise to enhance the customer experience.
STRONGER TOGETHER
JD Sports’ new CEO Regis Schultz said: ‘This mutually beneficial partnership enhances our strong customer connections through best-in-class retail experiences and early access both in store and online to a select range of additional Nike products.’
Schultz also stressed the partnership ‘amplifies the combined strength of the Nike and JD brands with our shared consumers, by leaning into their behaviour and journeys and creating new, richer and more engaging experiences. It provides further opportunity to inspire the emerging generation of aspirational consumers, who can continue to feel confident that they are being offered the very best of Nike products when shopping at JD.’
TOUGHING IT OUT
As Shares reported here, trainers-to-tracksuits retailer JD Sports’ first half results came in at the top end of management’s expectations.
However, the shares, down more than 50% year-to-date, came under selling pressure after the athleisure leader issued a cautious second half outlook and stuck with earnings guidance for the year to January 2023.
Management is concerned about the earnings impact from the cost-of-living squeeze, inflation and the potential for further supply chain disruption.
As for Nike, its shares fell on Wall Street overnight, leaving them down more than 40% year-to-date, after the sneakers giant said (29 September) inventory had ballooned by 44% year-on-year to $9.7 billion amid ongoing supply chain issues in the first quarter to August 2022.
Nike’s gross margin decreased by 220 basis points to 44.3% in the quarter due to elevated freight and logistics costs and lower margins in its NIKE Direct business as it slashed prices to shift excess stock.
The troubling inventory glut and declining sales in Greater China overshadowed an otherwise robust quarter, with sales and earnings per share beating consensus expectations.
‘Our strong start to full year 2023 highlights the depth and breadth of Nike’s global portfolio, as we continue to manage through volatility,’ insisted CEO John Donahoe.
‘Our competitive advantages, including the strength of our brand, deep consumer connections and pipeline of innovative product, continue to prove that our strategy is working. We expect our unrelenting focus on better serving the consumer to continue to fuel growth and create value like only Nike can.’
