A recent report by Unibail-Rodamco-Westfield predicts by 2025, more than 50% of retail square meterage will be devoted to ‘experiential retail’ as distinct from products or stock. Might seem difficult to comprehend but one of Australia’s most successful retail operations ever, JD Sports, is already doing it. In just over five years, the company has achieved a double-digit market penetration – and it’s still on the expansion trail. SCN’s Publisher, Michael Lloyd, talked to Hilton Seskin, Chairman, JD Sports.

Hilton Seskin, oozes retail. He’s a consummate retailer; passionate, driven and, what’s more, he loves his product. Seskin is Chairman of JD Sports (Australia & NZ), one of Australia’s most successful retail operations and no stranger to some of the biggest and best ‘Big Guns’ in the country.

Seskin grew up in South Africa, qualified as a Chartered Accountant and went into the hardware retail business there. He came to Australia in 1985 and, by 1987, he had become a junior partner in Rebel Sport. Rebel listed (ASX) in 1993, and Gerry Harvey took a majority stake-holding in 2001.

Seskin cut his retail teeth in Australia at Rebel; JD Sports was a natural fit for his talents. I asked him why JD is so successful.

“It appeals to the ‘ultra-cool’, sophisticated shoppers who know their product,” he replied.

“The top brands – the likes of Nike, adidas, ASICS, The North Face, Lacoste, New Balance and Puma, regulate their supply and segment the marketplace. JD builds exclusive assortments with our key brand partners globally and, given our local scale and success, we now have the power and consumer connection to produce products only for the ANZ market. JD is the chosen partner to launch new products and acts as a key access point for the sneaker obsessed teen to get the best high heat releases. Although footwear leads the launch calendar, this also includes apparel, from premium brands to the latest trends for men, women and kids alike – we even carry entire brands exclusively and help grow and establish them within the marketplace.”

One learns something every day; I knew the Rolex’s of this world, the likes of Gucci, Hermès and Louis Vuitton limited certain models and styles, but I didn’t know the strategy extended to sporting footwear! Seskin continued to educate me: “It’s not just the footwear either. In our fashion ranges – EA7, Hugo Boss and Tommy Hilfiger – we showcase sports and lifestyle ranges that are diffusion lines of luxury brands but built for the JD consumer. If you don’t shop at JD, you don’t get it! It’s as simple as that.”

Seskin told SCN that in the early days of JD Sports in Australia, getting that point across to landlords was difficult. “People understand exclusivity when it’s traditional stuff – the designer brands, the luxury jewellers, the top-notch watchmakers, even the top of the range car market. But exclusivity is now the province of the ‘super cool’ – a younger market whose dress is an expression of their lifestyle.”

It’s this understanding of their customer that gives JD the edge, says Seskin: “They’re knowledgeable, sophisticated, intelligent and, if you respect that, you secure their loyalty.”

He gives the example of the JD Sports ‘raffle’. At the time of a launch – be it a new range or product – only limited stock is available; at other times, a special range is made exclusively for JD Sports. JD contacts its loyal customers and conducts a sophisticated raffle process for fairness and reward – lucky winners get access to the exclusive items. The customers know that the raffle is fair; everyone has an equal chance and it’s that relationship that separates JD Sports from the rest.

“At first, the landlords weren’t aware of that,” says Seskin, “they’d say, ‘we’ve already got enough shoe shops’ and we had a hard time convincing them we were different.” But that, he emphasises, was in the early days; today it’s a different scene. “When they tasted the success, suddenly there was a hunger for our stores. The fear of us cannibalising sales from others was gone. They saw people shopping online for JD gear because much of our product was not available elsewhere in the marketplace. We’ve grown the sports lifestyle category, and that’s good business for everyone – even our competitors!”

But as well as the product, Seskin is keen to point out that the ‘store’ itself is revolutionary. “Today, people want experiential retail,” says Seskin, “they want theatre and a store reflective of their lifestyle. Our stores are highly digital, they’re dynamic and house ‘shops within shops’ for key brand partners. We have kiosks in every store – digital shopfronts providing access to expanded global product ranges– and sales from those kiosks go directly back to the store to drive engagement with team members.”

Numbers tell the story
The JD Sports story in Australia and New Zealand, is anything but a fictional tale. It’s a story dominated by the number ‘five’, which shows the incredible power of the brand and its success.

JD has achieved a double-digit penetration of its market in just more than five years. It now has 50 stores with a combined turnover in excess of $500 million. That’s probably an all-time retail record for this part of the world – and it’s unlikely to have been achieved anywhere else onthe globe.And JD Sports, according to Chairman Seskin, is in expansion mode.

He says JD Sports is well represented in the larger centres in the major cities but he wants to reach further. “We know our customer; we know what they like and we pride ourselves that our engagement with them is ‘off the charts’. It’s about their lifestyle, their music, their values; it’s about our credibility – we’re connected to youth culture and to do that authentically is difficult,” he says. “Young people are the first to call you out if you get this wrong.”

Seskin maintains there’s a long way to go to reach JD Sports’ potential in Australia and New Zealand. Already their relationships with the ‘Big Guns’ landlords are well established but he wants to reach other centres, irrespective of their size or location. “We know our customers, where they live and what they buy. If they haven’t a convenient store located near them, they shop with us online, so we’re aware of the demographics; we know a store will be successful before we open it!”

In August this year, JD Sports will open an international flagship store at Sydney’s Mid City Centre. It’s a 1,000m2 two-level outlet with a massive frontage to Pitt Street Mall. With 50 stores in five years and a turnover in excess of half a billion dollars, it looks like a ‘lay-down misère’ in terms of retail success.

It’s a powerhouse success story and, in terms of feeding the market, understanding it and responding, JD Sports is a leading-edge retailer. JD Sports Australia and New Zealand has, as previously stated, achieved a double-digit market share in a very short time; leasing executives would be well advised to court the operation!

This profile features in the latest edition of Shopping Centre News magazine – premium members can view the full digital magazine here.