JD Sports has announced plans to open more than 140 shops in Mexico, as the ‘King of Trainers’ battles to halt falling sales and move on from a recent boardroom bust-up.
The FTSE 100 retailer said it has reached an agreement with Axo, a Mexico-based retail distributor, to operate its stores in the country.
JD Sports will hope that this expansion halts the sales slowdown it is seeing in its crucial North American market. The region currently accounts for 38 per cent of its global turnover but sales here fell by 6.8 per cent in the three months to August.
Under the deal, Axo will operate JD’s stores and online retail using its brand and intellectual property, with the shoe and sportswear seller set to offer a “differentiated proposition” to the Mexican market.
The FTSE 100 retailer believes there is huge potential in the Mexican market, telling shareholders that about 40 per cent of its 130m citizens are younger than 25.
“Mexico is a market with a large, highly engaged consumer base and a demographic profile which aligns strongly with JD’s unique position as a curator of footwear and apparel trends across sport, music and fashion,” the group said.
The country’s activewear market is valued at about $6.5bn and is tipped to grow to $10bn by 2034, according to JD.
Régis Schultz, JD’s chief executive, said: “JD’s product offering aligns closely with consumer demand in Mexico and we believe our position at the intersection of sport, music and fashion will deepen the connection we have with that consumer.”
Schultz added that Axo’s “deep market expertise, strong operational platform and proven experience with leading international brands make it uniquely placed to help deliver the JD proposition in Mexico and unlock the opportunity that exists there”.
Schultz under pressure
The retailer will begin opening its more-than 140 Mexican stores next year. The group will later upgrade its best-performing sites, in line with its “bigger and better” flagship store strategy.
JD’s deal with Axo marks the latest expansion of its global franchise platform. Between JD and Courir, the French trainer seller it bought in 2024, the group operates 75 franchise stores in Europe, the Middle East, Africa and Asia.
The ‘King of Trainers’ is launching in Mexico in a rocky period for the group, coming off the back of a profit warning and a boardroom succession row.
Last month, JD slashed its upper profit target by £50m to £800m as it warned that sluggish US sales and intense discounting by its rivals is threatening its growth.
“The market stayed highly promotional, reflecting the consumer and footwear product cycle headwinds our industry has faced in recent quarters, whilst our core consumer was impacted by incremental cost-of-living pressures,” Schultz said.
The retailer’s chief executive has only recently survived a plot to push him out of the company. Earlier this year, JD chairman Andy Higginson quit the group’s board after failing to convince it to oust Schultz.
Investors are growing impatient to see solid signs of progress from Schultz’s growth plan. In August, JD appointed former Ikea boss Peter Agnefjäll to succeed Higginson.
