Global sportswear giant JD Sports to launch in Australia with first store to open in Melbourne

The global sportswear brand that bills itself as the “Undisputed King of Trainers” is getting closer to opening in Australia, with the first JD Sports store expected to begin trading in Melbourne next month.

Meanwhile, the brand has also been amping up its social media presence and is advertising retail manager jobs for stores in Sydney and on the Gold Coast.

Australia has been preparing for the entry of UK activewear and sports shoe store JD Sports since September 2016, when its parent company JD Sports Fashion PLC revealed it had acquired an 80% stake in Australian retailer Next Athleisure, which operates the Glue clothing brand, for $6.6 million.

“This business and its management will provide the platform to open JD in Australia,” JD Sports Fashion stated in its 2016 half year report.

The Next Athleisure business is chaired by retail heavyweight Hilton Seskin, the Rebel Sports founder who went on to own Glue Store and the franchise for Topshop and Topman in Australia.

Speaking to The Australian over the weekend, Seskin said there is a clear market opportunity for the JD brand to enter the country.

“JD had transitioned their business into an amazing lifestyle business that was really sport-related — and there was a gap in this market for that,” he said.

After Next Athleisure sold an 80% stake to JD Sports, Seskin also diluted his holdings. JD Sports now owns 80% of the new company, known as JD Sports Fashion Holdings Australia. Seskin holds 20% and will continue to be involved in the company as JD Sports expands in Australia, The Australian reports.

JD Sports sells sports and footwear from global players like Nike, and markets itself as a specialist in running shoes. In 2016, JD Sports Fashion PLC booked £1.82 billion pounds ($2.22 billion) in revenue, and a before-tax profit of £151.7 million ($186.4 million).

The Australian reports the first store opening will be in Melbourne Central at the end of April, however, over the past month JD Sports has advertised for Australian staff to assist with its digital strategy, in-store visual merchandising, store operations and customer service management in Sydney and on the Gold Coast.

“JD Sports will open its first physical locations in Australia in early 2017 and we are on the lookout for high energy Casual and Part-time Sales Assistants to join our company,” the company says in its advertisements for staff.

The business has also started promotions through its Facebook page and Instagram account, focusing on new-release sports shoes that are on offer through the company.

JD Sports will be hoping to secure a slice of the local fitness and athletic clothing retail sector, which IBISWorld estimates to be worth $2 billion annually.

The sector is expected to grow at 2.9% annually from 2017, but the market is still dominated by the likes of Rebel Sport, whose parent company Super Retail Group still holds a 30% market share.

IBISWorld estimates Lorna Jane holds 12.4% of the market, while 7.3% of sales over the past year have come from Footlocker.

The space where brands still count

Australia has seen a number of global entrants into fashion’s middle market, but sportswear is one area where the big name brands still count, says Retail Oasis strategist Pippa Kulmar.

While the likes of Cotton On are dabbling in their own lines of activewear and sporting and fitness goods, JD Sports will be entering a market where shoppers don’t mind paying a little extra in the quest for quality, says Kulmar.

“If you look at the success of Lululemon, I don’t think there’s any problem with price [in this sector] — it’s all about the brand,” she says.

Australian retailers that stock big sporting brands like Nike and Adidas tend to have a more limited stock selection than other retailers globally, but Kulmar believes JD Sports could potentially bring a sense of exclusivity through its partnerships with these big names.

“I think if they could bring some of that exclusivity of stock. I think there’s huge potential in the activewear market to play to those exclusive brands,” she says.

Whereas traditional retailers have previously been criticised for failing to pivot towards new approaches and technologies, the sporting goods category is one area in which “cutting edge” developments are a key selling point, Kulmar believes.

“What’s lacking in the middle market is there in the sports market. For example, you can tell if someone’s wearing a Lululemon product,” she says.

The longevity of the brands that JD Sports focuses on will be another strength, Kulmar believes, with the sustained success of brands like Nike showing the importance of exclusive products in the sportswear market.

“If you look at Nike and that market, it’s managed to maintain dominance over an incredibly long period of time,” she says.

“And then there’s this massive casualisation of [sportswear] fashion — it’s become an acceptable weekend [style] for men, as well as women. I can only see that sportswear will continue to be all about brands.”

SmartCompany contacted JD Sports for further information but did not receive a response prior to publication.

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