JD Sports takes expansion to new level: Is footwear a bright spot in Aussie retail?
Thursday, April 12, 2018/
In an age of downsizing store footprints, one global retailer is focused on expanding its offer into more-traditional Australian bricks-and-mortar shopping centres.
UK footwear retailer JD Sports launched its newest store in Macquarie Shopping Centre this morning, bringing the total number of outlets to nine since its launch in April last year.
The brand, brought Down Under by serial retail founder Hilton Seskin, has repeatedly said it has achieved great results since launching its first bricks-and-mortar store in Melbourne. Despite many retailers reporting that shopping centre rents are making things impossible for traditional stores, JD Sports has largely been sticking to these traditional landlords, with sites including Doncaster and Highpoint shopping centres in Victoria.
The brand is also planning on opening another store in the coming month at Penrith.
In a statement provided to SmartCompany, Seskin said the brand’s success so far comes down to “leveraging the retail theatre that JD is known for globally”. This week’s store opening will include performance events like street dancers, which have previously been present at the company’s flagship store launches.
JD Sports says its focus in each new store will be revealing new, exclusive shoe designs, with “50 new styles launching on opening day” of the new store.
“To celebrate the store openings JD Sports is offering customers the opportunity to ‘Win Trainers for a Year’ as well as a range of interactive and entertaining elements,” the company said.
JD Sports is not the only footwear retailer to expand its store network at a time when many brands are rethinking their strategies. In March, Munro Footwear Group chief executive Jay Munro said his company had found a stellar opportunity to open 22 new stores through an acquisition of Betts-branded stores.
“I think there are opportunities for any type of business to do this, as long as they can define a market where there’s not already a significant amount of competition or replicating an existing offer,” Munro told SmartCompany when discussing the store expansions.
JD Sports’ expansion is occurring against a backdrop of increased global competition in the sporting goods space in Australia. French sporting goods retailer Decathlon is now up and running after a December launch, while Rebel Sport owner Super Retail Group rebranded its Amart stores to Rebel last year, to strengthen its brand position as the landscape changes.
The fact that JD Sports has been able to open so many stores in quick succession shows the company “certainly has plenty of capital behind them” to take on big retail leases, says associate professor at Queensland University of Technology Business School Dr Gary Mortimer.
“This [the expansion] is about getting product out of Europe and Asia and into Australia. If you’ve only got one store, it’s very expensive to do that,” he tells SmartCompany.
Athletic retail could continue to be a bright spot in Australia’s challenging retail landscape, given that JD Sports and Decathlon do present products that are genuinely not available elsewhere in Australia, Mortimer says.
“They really are the next disruptors in retail,” he says of the brands.
Success will be a longer term play
However, the overall success of brands like JD Sports will take longer than just one year to become apparent, says Paul Harrison, a consumer behaviour expert at Deakin University.
“I think any company opening that many bricks-and-mortar stores now is very brave. It would be interesting to know exactly who [JD Sports’] target market is, because what I know about the younger target markets in Australia is that they’re much more confident buying these kinds of things online,” he says.
However, for global retailers in any sector, it remains important to move fast and confidently establish its presence fast, he says.
“It’s a particular strategy that you see from time to time, where they pour huge resources into it and give it a big shot … If you’re an entrepreneur who wants to be successful, you have to come out and be competitive.”