JD Sports has been a familiar name on our high streets here in the UK since the 1980s as a leading retailer of branded sports and casual wear. And with a global presence already across 21 territories, it may come as a surprise to some that the brand has not ventured into the world of franchising earlier.
All of that is set to change however, as JD Sports announced this week that it had signed its first franchise agreement, partnering with wellbeing company GMG who have their headquarters based in Dubai and already have a portfolio of over 500 GMG Sports stores across seven concepts, including flagship brand, Sun and Sand Sports. The ten-year franchise agreement sets in motion plans for JD Sports outlets to launch across United Arab Emirates, Saudi Arabia, Kuwait and Egypt, with the target of opening between 200 and 300 stores a year for the next five years.
This might seem an ambitious target but Regis Schultz, CEO of JD Sports since Summer 2022 is very familiar with the Middle Eastern market, having previously been the president of retail at Al-Futtaim Group, a large Dubai based conglomerate, and said that he was confident that selecting GMG as their first franchise partner will be the key to success.
In a statement released to investors on July 3 2003, Schultz said “We are very pleased to be delivering this historic deal, the first franchise agreement JD has entered, in partnership with GMG. Through my own career, I have seen firsthand the massive untapped potential for retailers in the Middle East, and I am certain that GMG – with their expansive retail expertise and a local understanding of the customer – are the best partners for us in the region”
He also hinted that this would not be the first and only venture into franchising for the sports brand, saying “We are excited by the opportunity to explore franchise partnerships as an avenue for further store growth in underpenetrated markets, leveraging the global growth phenomenon of athleisure while bringing our proven proposition to more customers worldwide.”
This stride into franchising is part of JD Sport’s “JD Brand First” strategy, which places the focus firmly “on the core of the business and putting the JD brand first, with the aim of increasing JD’s store footprint globally through new stores and partnerships.”
The Middle East has become a magnet for franchising over recent years, with many large global brands drawn to the affluent customer base residing there, as well as the booming tourism industry. The UAE in particular is considered to be one of the most popular destinations for shopping tourism and the country’s retail sector is continuing with its accelerated growth, with the two-and-a-half day weekend introduced at the beginning of 2002 considered to be one of the contributing factors. The State of the UAE report on the retail economy prepared by Majid Al Futtaim and based on Q4 2022 statistics and full year market trends and consumer behaviour analysis stated that “The longer 2.5-day weekend boosted weekend retail spending. Weekend spending rose by 11.3% in 2022 compared with the previous year – almost 6 percentage points more than weekday spending over the same period. This resulted in additional weekend spending of approximately AED 5.5 billion for the retail economy”
Combined with that, a 2022 report by Data Bridge, suggests that the sports apparel market in the region is projected to reach a value of $23.2m by 2029, with a compound annual growth rate (CAGR) of 4.8%, fuelled by an increased interest in health and wellbeing post-pandemic. All factors which therefore should give JD Sports a sporting chance of success in this their first franchise partnership.
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