JD Sports hits back at warehouse 'prison' claim as profits soar 81%

James Sillars, Business Reporter

JD Sports says a TV report on working practices at its Kingsway warehouse, in which workers complained about "prison" conditions, did not represent a "balanced characterisation" of life there.

The retailer asked business services firm Deloitte to investigate allegations raised by the Channel 4 documentary last December, saying at the time it was "disappointed and concerned."

The site, in Lancashire, employs over 1,000 staff and agency workers.

The programme included footage apparently showing people fearful of disciplinary polices.

JD later denied allegations it operated a 'strike' system covering things such as lateness and using a mobile phone.

Executive chairman Peter Cowgill told Sky News that since the claims it had welcomed visitors including ministers to the site and they had all been "amazed by the facility".

"We want the people to enjoy working there. We've had to make some minor adjustments as we were making beforehand and we continue to, we're always looking at areas to improve the business generally and that's included."

The Channel 4 documentary was an "unbalanced representation", Mr Cowgill said.

The company said on Tuesday: "As the wellbeing of all staff is a key priority for the group and it is an area where we strive continually to improve performance, the board appointed Deloitte to conduct an independent review of the allegations made.

"That review has now been completed and Deloitte's conclusion was that the allegations did not represent a balanced characterisation of working practices at Kingsway.

"As before, we remain committed to continually reviewing and implementing improvements in day to day procedures there."

The company gave no more detail on the inquiry's conclusions.

JD's high street rival, Sports Direct, has been at the centre of similar allegations - prompting it to announce a string of reforms to pay and working practices following a backlash by MPs.

JD announced the principal finding of its investigation as it revealed an 81% leap in annual pre-tax profit for the JD Sports Fashion group to £238m for the year to 28 January.

Revenue jumped by 31% to £2.4bn as the sportswear retailer, which also owns Blacks and Millets, continued its expansion.

It credited its core JD operation for its record profit figure, with a net increase of 54 new stores opening on the continent during the period and like-for-like sales rising 10%.

Shares in the FTSE 250 firm hit a new all-time high in response to the figures and were 8% ahead at the close.

However, the company said it was "unreasonable" to expect that sales growth to be maintained.

Mr Cowgill said: "Whilst we must recognise that there are external influences which may impact the latter part of the year, notably inflationary pressures arising from Brexit, the board remains confident in the robustness of the JD proposition and believes that the Group is well positioned for further profitable growth."

The company's warning of a potential hit to UK sales in the wake of the referendum chimes with growing evidence that shoppers are starting to row back on spending as retail prices rise.

Retailers are under pressure to pass on higher import costs - a consequence of the pound's plunge in value against other major currencies since the vote.

Industry figures released on Tuesday showed the third consecutive month of falling sales in March.