Sports Direct annual profits plummet 59%
Firm blames weak Pound as shares fall
by Abi Moses on 20th July, 2017
Annual profits at British retailer, Sports Direct have fallen by 59% from £275.2m to £113.7m, as the firm feel the effects of a weaker Pound following last June's Brexit vote.
Sports Direct source most of its goods from Asia and pay for these products in US Dollars so when the Pound crashed after the Brexit referendum, the firm were left short.
Whilst accepting that the weak Pound had led to a "significant fall in profits", chief executive, Mike Ashley, remains optimistic about the group's future. Mr Ashley said Sports Direct are attempting to "conservatively manage the currency volatility that is reflected in our full year results" whilst claiming that trading at their new flagship stores is going better than expected.
Mike Ashley has insisted that Sports Direct aim to become the "Selfridges of sport" and have announced a "new strategic partnership" with Japanese sportswear firm, Asics who, in Sports new "premium" stores will manage dedicated areas.
Neil Wilson, senior market analyst at ETX Capital, claims that a "spending spree of acquisitions" over the year had an impact on profits but placed Sports Direct "in a better position to make a strategic move in, for example, the department store area or in the US with its US acquisitions."
After seeing their market value nosedive in 2016, Sports Direct seem to be bouncing back, despite the fall in profits. Their share price is up 8% in 2017, closing at 301p on Wednesday.
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