JD Sports to create new CEO role, sees encouraging trading
JD Sports Fashion is to divide Peter Cowgill’s current role of executive chairman and chief executive and is pondering returning government financial support handed out during the pandemic.
The announced changes came just ahead of Thursday’s annual general meeting (AGM) where the retailer is expected to face intense shareholder opposition over bonuses paid out to Cowgill and the retailer’s “inappropriate” pay policy.
The company is also under fire for paying bonuses while taking £300 million in government and Bank of England support during the pandemic.
Cowgill was awarded £4.3 million in bonuses last year, taking his total pay to £5million, despite taking a voluntary 75% salary cut.
“In conjunction with the board's succession planning and to strengthen the depth of the management team it is our intention to divide the current role of executive chairman and CEO before the next Annual General Meeting and a comprehensive process will commence shortly”, Cowgill said.
“We fully accept that the composition of our board should reflect the current scale, momentum and global positioning of the group as well as its increased level of market capitalisation”.
He added: “In addition, the board fully supports… the need to create additional diversity within its membership. We are also mindful that certain board members have served for longer than the recommended period of tenure within the Corporate Governance Code.
On the thorny subject of government financial support during the pandemic, JD said it will “consider repaying… payroll costs which we have received whilst stores have been temporarily closed during the current year”.
However, it won’t make a decision “until there is certainty on both the full easing of restrictions and the consequences of any further lockdowns during our peak trading period this winter”, it said, adding: “While we must recognise the risk of further temporary store closures across our global estate and the potential repayment of government support to payroll costs in the current year, we presently believe that the group is on track to deliver profit before tax and exceptional items for the full year at an increased level of no less than £550 million”.
In a trading update, JD also said its 3,300 stores across 29 countries are “substantially... now trading although we continue to experience some temporary closures in parts of the Asia Pacific region”.
It said trading in the immediate period after reopening was “particularly encouraging in the UK, [but] consistent with other retailers, store footfall remains fragile with online traffic at elevated levels”.
In the US, it also said its JD stores continue “to make positive progress” with 60 now trading following the opening of five sites and the conversion of a further six stores which previously traded as Finish Line.
“It is still our intention to convert approximately 50 stores from Finish Line to JD during the current financial year”, it added.
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