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Necessity proves the mother of invention

By: Jeff James

Listed Under: Top Story

Published: Monday, June 22, 2009

242 UK sports and leisurewear companies rated as ‘Strong’ in latest financial analysis

Despite the recession, 242 of the UK’s top sports and leisurewear companies have been awarded a strong financial rating for their outstanding financial performance in a new study by industry analyst Plimsoll Publishing.

Plimsoll has rated each of the UK’s largest 682 sports and leisurewear companies on their overall financial performance. Ratings have been given as ‘Strong’, ‘Good’, ‘Mediocre’, ‘Caution’ and ‘Danger’.

Says David Pattison, Senior Analyst at Plimsoll: “It was no real surprise to see the high number of companies on the ‘Danger’ list, given the current economic crisis affecting the sports and leisurewear industry. However, we were very surprised to see the high number of excellent businesses making it on to the strong list. I think these firms have really upped their game in these difficult times and they are concrete proof that necessity is the mother of invention.”

During the latest financial year analysed, these 242 strong firms have boasted the following impressive performance statistics:

• On average these firms have seen sales increase by 3.1 per cent. This figure is an impressive statistic in a market that is generally flat. This demonstrate the strongest players’ ability to take market share from their rivals

• For the strong companies, their profit margins are sitting at an average of 3.8 per cent as they have cut costs and used competitive buying to increase their bottom line. Debts have all but been removed from these companies. Most are operating completely debt free, thus reducing their reliance on the banks and other lenders.

• Big improvements in efficiency means these firms are now delivering over £175,000 sales per employee ,compared to others in the industry that struggle to deliver £130,000. This gives them a significant competitive advantage.

“Obviously, there are real concerns over the 284 firms rated as ‘Caution’ and ‘Danger’, their futures look extremely uncertain,” says Pattison. “Their management are now operating under severe financial pressure where even normal trading is proving hazardous. Many of these firms seem likely to be sold off; they are at an extremely high risk of failure unless they turn their performance around fast.”

Copies of the Plimsoll Analysis - Sports & Leisure Wear can be obtained for £350 by calling Clair Sherwood on 01642 626422 or emailing .(JavaScript must be enabled to view this email address).