**London**: Andrew Higginson, chairman of JD Sports, highlights the potential impact of US tariffs on pricing and operations, emphasizing uncertainty and risks to consumer pricing as the company navigates challenges with Asian manufacturers amid declining stock performance and shifting market dynamics.
Andrew Higginson, the chairman of the Bury-based sportswear retailer JD Sports, has articulated concerns regarding the implications of US President Donald Trump’s trade tariffs on the company’s pricing strategy. In an interview on the Today programme, Higginson stated that if the tariffs remain at their current high levels, consumers can expect to see increased prices on products. He expressed that the current trade policies create significant uncertainty, which could adversely affect the company’s operations.
JD Sports, which has a strong reliance on manufacturers located in Asia, faces potential challenges due to tariffs affecting imports from countries such as Vietnam, China, and Cambodia. As reported by City AM, manufacturing in Vietnam is particularly significant as it contributes around a quarter of the country’s GDP. The tariffs have already impacted JD Sports’ stock performance, with shares dropping nearly 11 per cent since April 2, as investors grow increasingly wary of the potential financial fallout.
Higginson noted that it is “unlikely” for shoe production to relocate to the US, pointing out that the duration and height of tariffs will play a critical role in any such decisions. He commented on the substantial investments that countries such as Vietnam have made in manufacturing technology, stating, “It will take a lot to overturn the economics of a country that has invested heavily behind these things.” He dismissed the notion that the situation is purely about cheap labour, emphasising that the manufacturing capabilities in these countries are far more sophisticated.
The relationship between JD Sports and Nike, its primary global partner, further complicates the situation. Nike also manufactures its products in Asia, and after the tariffs were initiated, the company has reported an 18 per cent decline in share price amid already struggling sales figures.
As JD Sports continues to expand its presence in the US—where approximately 40 per cent of its sales were recorded as of August last year—Higginson foresees that pass-through costs will likely result in higher consumer prices. “What I think the likely result is that things will just be more expensive if these tariffs stay at these highs,” he stated.
Analysts have cautioned that consumers might resist these price hikes, indicating a potentially significant impact on sales. Rob Morgan, chief investment analyst at Charles Stanley, warned that while any benefits from a potentially more favourable tariff regime compared to other trading partners would be slow to realise, fluctuations in sales could create a ripple effect of inflation across the UK and Europe, even in light of the UK’s comparatively lower tariffs of 10 per cent.
Despite these challenges, Higginson maintained a positive outlook on the future of JD Sports, remarking, “I think we’re running good businesses that are well founded on strong customer demand, and over time, whatever adjustments will have to be made with supply chains and so on will work their way through, and we’ll still have a good business at the end of it.”
Source: Noah Wire Services
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