Lifestyle Sports profits fall 20% after outlet closures
Operating profit slips to €5.2m from previous year’s Euros-boosted €6.6m
Dublin footballer Jonny Cooper at the opening of the Lifestyle Sports flagship store in Arnotts, Dublin in 2016.
Profits at Lifestyle Sports fell by 20 per cent last year as it closed a number of stores and engaged in a restructuring of the business.
Lifestyle Sports is owned by members of the Wexford-based Stafford family, which also controls Campus Oil. It stocks more than 3,000 sports performance and sports style products from brands such as Nike, Adidas, Under Armour, Converse, Puma and Reebok.
Revenue for the year ended September 23rd, 2017, amounted to €103.1 million, which was up from €101.2 million the year before, the latest accounts filed by the company show. The business described its revenue growth as “satisfactory”.
Operating profit was €5.2 million, which was down from €6.6 million the year before, while profit for the financial period was €4.2 million, which was down from €5.3 million.
Earnings before interest, taxes, depreciation, and amortisation amounted to €10.2 million, which was “broadly in line with the prior year”. The chain was boosted during the year by the signing of a five-year partnership with Leinster Rugby.
However, operating profit before exceptional charges amounted to €6.3 million compared to €6.7 million in the prior year with the decline due to “depreciation charges associated with accelerated depreciation in light of store closures”.
Lifestyle Sports is in the crosshairs of Mike Ashley’s Sports Direct, which has pencilled in Ireland for a raft of “new generation” store openings, with a focus on large-format flagship outlets.
In addition, French sports retail powerhouse Decathlon is set to enter the Irish market. It will only offer its own brand products for sale, however, which means it will not be in competition with Lifestyle on prices in terms of like-for-like products.
Lifestyle Sports achieved sales growth for the sixth successive year during the period, and the directors described the figures as “very positive”.
“Of particular note was the exceptional growth driven by the online business and the fact that, despite strong competition in a challenging marketplace,” the company said, “the brand also delivered positive market share growth.”
The business closed six stores during the year reflecting the strategy of “moving to fewer, bigger, better stores”. Exceptional charges of €1 million were accumulated on the closure of stores.
The directors said the results for the year were not comparable to the previous year which benefited from Ireland’s participation in the European Championships in June 2016 and on the back of the end of the Rugby World Cup in England in October 2015.
“These events drove exceptionally strong growth in replica sales in the prior year,” it said.
“The business has also invested significantly during the year in key growth enablers such as the commencement of a multimillion, multiyear investment in our entire IT platform.
“While this will have increased our cost base and by extension depressed profits somewhat during the year, it will be a hugely positive step in setting the brand up for our next phase of growth.”
The company had 483 staff members on its books for the year, up slightly from 470 the year before. It spent €12.6 million on wages and salaries. It made charitable donations of €8,816 during the period.