Shares in troubled retailer Sports Direct (LON:SPD) rose nearly 8 percent on Thursday, despite revealing a 60 percent plunge in profits over the year.
The company attributed the profit fall to the slide in sterling in the wake of Brexit, meaning it had to pay more for its imported goods. Underlying pre-tax profit fell to £113.7 million over the financial year, from £275.2 million the year previously. The company said had now put in place hedging arrangements to “minimise the short-term impact of currency volatility”.
However despite the negative financials shares in the company rose on Thursday, after Sports Direct insisted it was on track to become the ‘Selfridge’s of sport’. The group is making a move upmarket, with investors cheered by the idea that “elevation of our retail proposition continues to be a key objective”.
CEO Mike Ashley said: “Sports Direct is on course to become the Selfridges of sport by migrating to a new generation of stores to showcase the very best products from our third-party brand partners. We have invested more than £300 million in property over the last year, and I am pleased to report that early indications show that trading in our new flagship stores is exceeding expectations.”
The company have been hit by significant controversy of late, after it was found that conditions at its warehouses were found to be like that of a “Victorian workhouse”. It has since put several new measures in place to ensure staff are comfortable in the workplace, with chairman Keith Hellawell said the company had made “positive progress” across the business as it continued to “strive to ensure that all of our people are treated with dignity and respect”.
Sports Direct shares are currently up 6.72 percent at 320.90 (1000GMT).