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TX] JJB Sports is one of many high-street names to have reported sluggish sales over the festive season. On 7 January, the UK's biggest sportswear retailer issued a downbeat trading statement, reporting a 1.4% fall in like-for-like sales and a 2% drop in turnover over the six-week Christmas and New Year period. Full-year profits are now forecast at between £61m and £64m, down from the £70m previously predicted by analysts.

Whereas for some retailers this could be put down to a seasonal blip, JJB's disappointing festive performance is the latest sign that it is suffering long-term decline. The slump follows a lacklustre performance throughout 2004: last autumn it revealed disappointing half-year results that showed a 1.5% slide in turnover. At the time, JJB blamed the bad summer weather; for the latest figures it cited a 'tough trading environment'.

Yet there is more to the decline than the general retail climate. The JJB brand is struggling to retain a distinctive brand in the sportswear sector. Established in 1971, the company became the UK's leading sports retailer when it acquired rival Sports Division in 1998, then benefited as sportswear became a fashion trend. But recently JJB has faced strong competition from supermarket clothing ranges and discount retailers, which have begun to sell cheap sportswear. At the other end of the market, major sports brands such as Nike and Adidas have sought to build their own retail presence with 'destination' outlets.

To tackle these challenges, JJB is moving away from smaller high-street stores toward an out-of-town 'superstore' format. It has also expanded into leisure, opening 21 combined health clubs and superstores.

JJB's shares have risen recently amid speculation of a takeover bid, and last year the company rejected an offer from private equity group Cinven. As the predators circle, we asked two sportswear experts what JJB can do to get its brand back on track: Eddie May, co-founder of public relations firm Threepipe Communications and a former Umbro UK marketing manager; and Lee Farrant, a partner at brand experience agency RPM, which works with sports brands.

VITAL SIGNS

JJB Sports results for 26 weeks to 25 July

2004 2003 % change

Turnover £363.0m £368.5m -1.5

Underlying operating profit £28.0m £37.1m -24.6

Reported operating profit £21.6m £25.2m -14.0

Source: JJB Sports interim results

NOTE: excludes figures for TJ Hughes, which was sold in November 2003

DIAGNOSIS 1 - EDDIE MAY CO-FOUNDER, THREEPIPE COMMUNICATIONS

The UK sports trade has become polarised in recent years, with fashion-driven stores selling exclusive, expensive gear at one end and the discount chains and supermarkets flogging cheap basics at the other.

JJB has been struggling to compete at the value end of the market, and it will never be seen as a fashion destination. This has led to some disappointing recent figures, but it could prove to be an opportunity for the company to carve out a fresh brand position.

JJB needs to continue to move away from the bottom end of the sports market and establish a position as the 'real' sports store, providing a product range and level of service not found elsewhere on the high street.

To back up what happens inside the stores, JJB needs to let consumers know what it stands for as a brand. So far its fitness and soccer centres have proved a commercial success and play a key role as a tangible connection between JJB's stores and some actual sporting activity. More of these will be needed around the country.

REMEDY

- Work closely with the big sports firms to get the best products into stores.

- Introduce more specialist brands to support a 'real' sports positioning.

- Move as far away as possible from the bargain-basement end of the market.

- Train staff to be the most helpful and knowledgeable around.

- Roll out more fitness and soccer centres across the UK.

- Promote the JJB positioning through consistent brand communication.

DIAGNOSIS 2 - LEE FARRANT, PARTNER, RPM

JJB is floundering in a leisurewear market of extremes. Today's lifestyle shopper has more choice of fashion outlets, styles, brands and price points than ever. At the same time, JJB is failing to address the requirements of sports enthusiasts, who seek out independent specialists or go online to satisfy their technical and performance needs.

The chain lacks a strong identity. Unappealing window displays close off the store, eliminating the visual journey that entices the customer inside.

Once inside, JJB shops are cluttered - it is not a welcoming environment in which to browse. Consumers usually visit with a definite purchase in mind, so impulse-buying opportunities are lost.

The densely stocked interiors do not allow customers to interact with the merchandise. JJB is not engaging consumers, especially women, who prefer clean lines, co-ordinated visual displays and clever communication.

Finally, staff often lack product knowledge. Sportswear customers need advice and reassurance before parting with their money.

REMEDY

- Make sure consumers return by becoming a 'destination' shop.

- Create a genuine in-store experience.

- Incentivise staff through regular training, particularly in customer service and sports knowledge.

- Reduce stock density and give brands space to speak for themselves.

- Cater for discerning customers with 'elite' products.

- Establish the JJB brand, its values and what it stands for.