JJB’s Deals With Nike, adidas May Affect Sports Direct

adidas, Nike Opening Exclusive Areas In JJB Sports

UK-based retailer JJB Sports has signed a deal with Nike to open 220 exclusive “stores-in-stores” by the end of the year and will open 250 by January ’09, according to Richard Fletcher of the London TELEGRAPH. JJB will create 350 “similar in-store areas” for adidas. The retailer is expected to open a total of 600 “stores-in-stores” for Nike and adidas by ’09. The Nike deal is a “further blow to investor confidence” in discount retailer Sports Direct, which “warned in its prospectus that exclusive deals between manufacturers and retailers could have a material effect on the group’s financial performance.” Sports Direct’s business model is “based on attracting shoppers into stores with deeply discounted brands such as Nike and Adidas and then selling its own brands –- including Lonsdale and Slazenger –-on much higher profit margins.” Observers believe that Nike may have been “spooked” by the extent of Sports Direct Deputy Exec Chair & Founder Mike Ashley’s “international ambitions” (London TELEGRAPH, 5/2).