ANNUAL REPORT AND ACCOUNTS REPOR RT TIMES SQUARE OPEN JD Sports Times Square, New York US SOON CONTENTS OVERVIEW 2 HIGHLIGHTS 4 WHO WE ARE 26 WHERE WE ARE 32 EXECUTIVE CHAIRMAN’S STATEMENT STRATEGIC REPORT 42 BUSINESS MODEL 44 OUR STRATEGY 48 PRINCIPAL RISKS 70 BUSINESS REVIEW 72 FINANCIAL REVIEW 75 PROPERTY AND STORES REVIEW 80 CORPORATE AND SOCIAL RESPONSIBILITY 109 SECTION 172 STATEMENT GOVERNANCE 114 THE BOARD 116 DIRECTORS’ REPORT 122 CORPORATE GOVERNANCE REPORT 129 AUDIT COMMITTEE REPORT 132 DIRECTORS’ REMUNERATION REPORT FINANCIAL STATEMENTS 162 STATEMENT OF DIRECTORS’ RESPONSIBILITIES 164 INDEPENDENT AUDITOR’S REPORT 178 CONSOLIDATED INCOME STATEMENT 178 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 179 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 180 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 181 CONSOLIDATED STATEMENT OF CASH FLOWS 182 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 258 COMPANY BALANCE SHEET 259 COMPANY STATEMENT OF CHANGES IN EQUITY 259 NOTES TO THE COMPANY FINANCIAL STATEMENTS GROUP INFORMATION 272 FINANCIAL CALENDAR 273 SHAREHOLDER INFORMATION 274 FIVE YEAR RECORD 275 GLOSSARY © JD Sports Fashions PLC 2020 Printed (ISO 14001 compliant) using vegetable inks on FSC accredited stock. Design and production: Navig8 www.navig8.co.uk HIGHLIGHTSOUR GROUP 3 REVENUE TOTAL DIVIDEND PAYABLE PER ORDINARY SHARE ** GROUP REVENUE BY £ 6,110.8m 0.28p GEOGRAPHICAL MARKET £4,717.8m 1.71p £3,161.4 m 1.63p £2,378.7m 1.55p £1,821.7m 1.48P 2020 2020 2019 2019 UK 43% 2018 2018 2017 2017 EUROPE 26% 2016 2016 PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS* PROFIT BEFORE TAX £438.8m £348.5m 2020 £355.2m £339.9m £307.4m £294.5m £244.8m £238.4m £157.1m £131.6m US 26% 2020 2020 2019 2019 REST OF WORLD 5% 2018 2018 2017 2017 2016 2016 GROUP REVENUE BY BASIC EARNINGS PER ORDINARY SHARE ADJUSTED BASIC EARNINGS PER ORDINARY SHARE* 25.29p 34.26p CHANNEL 26.90p 28.44p 28.83p 25.15P 18.38p 19.04p 10.03P 12.27p 2020 2020 2019 2019 2018 2018 2017 2017 RETAIL STORES 74% 2016 2016 NET ASSETS NET CASH* £1,289.2m £429.9m MULTICHANNEL 23% £1,076.8m £125.2m £834.3m £309.7m £578.8m £213.6m £499.8m £209.4m WHOLESALE 3% 2020 2020 2019 2019 2018 2018 2017 2017 2016 2016 2 Throughout the Annual Report ‘*’ indicates the first instance of a term defined and is explained in the Glossary on page 275. ** Final dividend withheld as cash was preserved due to COVID-19 outbreak. WHO WE ARE 5 TIMELINE 1981 1989 1996 2005 JD Sports opened JD Sports Fashion 57.5% of JD Sports its first store in Plc was listed on Fashion Plc was London, on Oxford the London Stock bought by the Street. Exchange. Pentland Group. JD Sports began with its first store in Bury, Greater Manchester. 2012 2011 2010 2009 JD Group acquired JD Group acquired Sprinter, a Chausport, a French leading Spanish Sport Retailer; Sport Retailer in the Group’s first footwear, apparel international presence The Group expanded and equipment; and entry into Europe. into the Outdoor JD Group opened JD’s first entry into market with the its first European Spain. acquisition of Blacks JD store in Lille, and Millets. France. 2016 2017 2018 2019 The Group launched its first JD The Group acquired The Group acquired Finish “JD Sports Fashion Plc store in Malaysia, JD’s first entry Hot-T, a South Korean Line in the United States, a was promoted into the into South East Asia. JD is now retailer of branded Sport Fashion Retailer with FTSE100 list for the first also present in Singapore and footwear. a store presence across 44 time on 24 June 2019. Thailand. The Group acquired states. The Group opened This is a very notable The Group opened its first Go Outdoors, the its first five JD stores in landmark for the Group gym as part of JD Gyms; an UK “destination” for the US: Chicago, Houston, which could not have affordable yet stylish gym everything Outdoors. Columbus, Washington been achieved without concept. and Indianapolis. the commitment of all The Group launched of our colleagues.” its first JD store in Peter Cowgill Melbourne, Australia. 4 7 WHO WETHE LEADERARE 6 WHO WE ARE 9 Established in 1981 with a single store JD SPORTS in the North West of England, JD Sports JD is a sports fashion, multichannel 781 retailer of branded sports and casual wear, Fashion Plc is a leading international combining globally recognised brands STORES multichannel retailer of sports, fashion such as Nike, adidas, Puma and The North Face, with strong own brand labels such and outdoor brands. as Pink Soda and Supply & Demand to provide an elevated consumer experience. JD is an industry leading retail business 19 which combines the best of physical and digital retail to give a compelling consumer proposition which enables its customers to TERRITORIES ACROSS shop seamlessly across all channels. THE GLOBE UNRIVALLED 8 WHO WE ARE 11 SIZE? FOOTPATROL Established in 2000, Size? specialises in 37 Footpatrol is famous for supplying the 2 supplying the finest products from the best sneaker fraternity with the most desirable brands in footwear, apparel and accessories. STORES footwear, apparel and accessories. STORES Initially set up to trial edgier product Specialising in new and classic sneakers, collections before introducing them to the limited editions, Japanese exclusives and mass market through the JD fascia, the rare deadstock. The original Footpatrol Size? offer has since grown to include its store is based in the heart of Soho on own roster of highly sought-after worldwide Berwick Street which is complemented exclusive product releases. Outside of the with a second store on the fashionable UK and Republic of Ireland, Size? has stores Rue de Temple in Paris. Footpatrol also has in Belgium, Denmark, France, Germany, Italy, dedicated local language sites for seven the Netherlands and Spain. other countries including the Netherlands UNIQUEand Germany. AND EXCLUSIVE 10 WHO WE ARE 13 CHAUSPORT SPRINTER Chausport operates throughout France 67 Sprinter is one of the leading sports 156 retailing leading international footwear retailers in Spain selling footwear, apparel, brands such as Adidas, Nike and Timberland STORES IN FRANCE accessories and equipment for a wide range STORES to a more family focussed customer through of sports as well as lifestyle casual wear a network of 67 stores and a trading website. and childrenswear. Their offer includes both international sports brands and successful LEADINGown brands. FAMILY 12 WHO WE ARE 15 SPORT ZONE PERRY SPORT AND Sport Zone is a well-established and leading 108 AKTIESPORT 96 multibranded sports retailer offering a wide apparel, footwear, accessories and STORES Sports Unlimited Retail operates in the STORES equipment range across multiple sports. Netherlands under the Perry Sport and The stores in Spain and the Canary Islands Aktiesport fascias. Aktiesport is the largest now trade under the Sprinter banner with sports retail business in the Netherlands Sport Zone now focussed in Portugal. with a sharp focus on selling football and lifestyle goods from various brands such as Nike, Adidas, Under Armour and FILA. Perry Sport is a sports and adventure retailer with a focus on functional sports, sports lifestyle LIFEand adventure simultaneously. STYLE 14 WHO WE ARE 17 FINISH LINE JD GYMS Finish Line is one of the largest retailers of 508 JD Gyms offers seriously stylish, seriously 30 premium, multibranded athletic footwear, affordable, award winning facilities across 30 apparel and accessories in the United States. STORES prime locations and plays host to a bespoke LOCATIONS Finish Line trades from over 500 branded mix of industry leading fitness equipment retail stores in more than 40 US states and and an exciting range of fitness classes. Puerto Rico and is also the exclusive partner of athletic shoes for Macy’s. SERIOUS STYLE 16 WHO WE ARE 19 TESSUTI SCOTTS Tessuti is a leading retailer of high fashion, 39 Scotts retails fashion and sport led brands 22 aspirational brands catering to both Men with authority to older, more affluent male and Women. Tessuti offers its consumers STORES consumers largely beyond school age, STORES a unique shopping experience through stocking brands such as Lacoste, Fred Perry, its website and concept stores and is Pretty Green and Paul & Shark. a consumer destination for luxury and desirable high fashion items, ranging from footwear and accessories to apparel. Tessuti stocks brands such as Hugo Boss, Polo Ralph Lauren, Parajumpers and Stone Island. HIGH FASHION 18 WHO WE ARE 21 MAINLINE BLACKS Mainline Menswear is an online niche retailer Blacks is a long established retailer of 57 of premium branded men’s apparel and specialist outdoor apparel, footwear and footwear, stocking brands such as Armani, equipment. Blacks primarily stock more STORES Hugo Boss and Ralph Lauren. technical products from premium brands such as Berghaus and The North Face helping Outdoor participants, from weekend family users to more avid explorers, reach their goals, noOUT matter how high. DOORS PREMIUM 20 WHO WE ARE 23 MILLETS GO OUTDOORS GO focuses on innovation and value, 67 Millets supply a more casual outdoor 97 helping people to step into the outdoors customer who seeks value for money, whether it’s to go walking, camping, cycling STORES providing for a wide range of recreational STORES or fishing. From unique product areas to activities with an emphasis on exclusive strong exclusive brands such as Hi-Gear, brands, such as Peter Storm and Eurohike. North Ridge and Freedom Trail, GO is constantly looking for fresh ideas to keep things fun. INSPIRING IDEAS 22 WHO WE ARE 25 TISO Tiso is Scotland’s leading adventure sports 13 retailer specialising in outdoor, mountain, skiing and cycling.