Athleisure retailer JD Sports is to overhaul its corporate governance and internal controls following the controversial departure of its long-time executive chairman Peter Cowgill.
Alongside its much-delayed full-year results, the FTSE 100 company said “a number of regulatory issues” had highlighted a need for more board-level experience and greater internal scrutiny and control.
JD has had several run-ins with the UK’s competition regulator, which slapped a £4.3 million (€4.98 million) fine on the group after Mr Cowgill was filmed meeting Footasylum’s chief executive Barry Bown in a Lancashire car park last year.
At the time, the two companies were supposed to be run independently of each other while the Competition and Markets Authority considered whether JD’s acquisition of Footasylum reduced competition.
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JD has also been accused of fixing the prices of replica football kits, though that investigation has not yet concluded, and has in recent years faced shareholder rebellions over executive pay.
Interim chairwoman Helen Ashton said the overhaul “will allow us to draw a line under the governance challenges” and “ensure that we have not just the right numbers but the right assumptions around them”.
Ms Ashton, a former finance director at Asos, joined JD as a non-executive in November but became interim chairwoman following the departure of Mr Cowgill, who was ousted in May amid disagreement over replacing his executive chairman role with separate chairman and chief executive roles.
Kath Smith, a brand executive who previously worked at Adidas, Reebok and The North Face, was made interim chief executive. She and Ms Ashton have said they do not intend to hold the positions permanently and recruitment processes for both posts continue.
“We have got a few candidates back in the process since Peter departed,” said Ms Ashton, who paid tribute to Mr Cowgill’s “unwavering commitment, vision and inspirational leadership” but stressed JD’s recent performance was not all down to one individual.
“The senior leadership team is extremely successful in its own right,” said Ms Ashton. The group’s North American chief executive and head of buying joined investor presentations earlier in the day.
Despite the turmoil, JD reported its best-ever financial results, with sales in the year to January 2022 rising more than a third to £8.56 billion (€9.94 billion) and pretax profit before exceptional items more than doubling to £947 million (about €1 billion).
JD incurred almost £300 million (€348 million) of exceptional charges, mostly relating to the valuation of put options in its US subsidiary, but finished the year with net cash of £1.18 billion (€1.37 billion).
JD said it expected a similar level of profit in the current year and that same-store sales in the first four months were 5 per cent ahead of last year.
Ms Ashton said it was very much business as usual. “The strategy is absolutely proven, we’ve got no reason to change.”
- Copyright The Financial Times Limited 2022
