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Volume 10 No. 25


German outdoor brand Jack Wolfskin China CEO Frederic Guiral de Haas said that a "state-led push" to promote winter sports in China ahead of the 2022 Beijing Olympics will "help outdoor brands maintain faster sales growth in the country than the overall sportswear market," according to Tom Hancock of the FINANCIAL TIMES. Undeterred by a lack of snow in most of China, public and private investment is "piling into ski slopes." Beijing aims to open 1,000 ski resorts by '30, "almost double" the current number. Real estate developer Dalian Wanda last month opened the world’s largest indoor ski resort in Harbin. De Haas said, "Winter sports is going to be very big for everyone; it's the next frontier. The ambition of the government to develop winter sports is going to create a huge momentum." He said that affluent consumers are "taking up outdoor pursuits such as mountain climbing and hiking," helping the brand's China sales rise more than 15% last year, mainly in premier cities. By comparison, overall sportswear sales in China rose 11% last year (FT, 7/16).

The Irish Rugby Football Union announced a budget deficit of €2.8M ($3.2M), down from the forecast of €4.7M ($5.4M), "after improved on-field performances saw a boost in finances," according to the IRISH INDEPENDENT. This is the first time that the IRFU recorded a deficit since '07-08, but in a statement it said that it anticipates a return to a "breakeven situation" no later than '18-19. The IRFU forecast a budget deficit of €4.7M "to address the immediate funding difficulties facing all four provinces due to player cost inflation and the need to continue investment in the grassroots game and player development." IRFU Honorary Treasurer Tom Grace said, "The Union and Provinces had a good year off the field and this has fed into the Union's financial result for the year with the €2.8M deficit being some €1.9M ($2.2M) better than budgeted" (IRISH INDEPENDENT, 7/14).

Sports Direct is "braced for a collapse in annual profits after a torrid year in which it has been battered by the fall in sterling since the Brexit vote and harried by corporate governance concerns," according to Oliver Shah of the SUNDAY TIMES. The discount retailer of trainers and tracksuits is set to report pre-tax profits of "less than half" last year's £275.2M, according to analysts. Sports Direct, which sources most of its products from Asia in dollars, "was not hedged against currency swings before last summer's vote sent the pound crashing." It then "botched a belated attempt to hedge itself." The results, due on Thursday, will be preceded by a High Court judgment in a case brought against Sports Direct Founder Mike Ashley by Jeff Blue, a former investment banker. Blue, who worked as an adviser to Ashley, claimed he was owed £14M from a bonus deal struck in a London pub in '13. Ashley denied making any agreement and called Blue a "total liar" (SUNDAY TIMES, 7/16). In London, Ashley Armstrong reported sales are "expected to have risen" from £2.8B to £3.2B ($4.2B) "on the back of new store openings." Trading has been "overshadowed by a whirlwind of negative publicity" following last year's investigation into its treatment of workers. For the last 12 months, Sports ­Direct's shares have been trading at levels not seen since the "dark days that followed its disastrous stock market float" in '07. Investment firm Peel Hunt analyst Jonathan Pritchard said that he expects gross margins to be "down a mile, mostly a function of the costly currency" (TELEGRAPH, 7/15).