Sports Direct proves there is life in the otherwise troubled high street

Mike Ashley's Sports Direct chain has defied the prevailing gloom across the retail sector with a strong set of trading figures in recent weeks, leaving the business on track to hit its full-year earnings target.

In an update to investors yesterday, the UK's biggest sporting goods chain by market share said sales in its retail division were up 12.4 per cent on the same period last year, generating 200 million in turnover. Retail gross profit was 8.8 per cent higher at 74m.

The strong performance by its core UK business in the nine weeks to 27 March pushed total group sales 10.3 per cent higher to 236m, while gross profit rose by more than 7 per cent to 88m.

Founded in 1982 by Newcastle United owner Ashley, who retains a controlling stake in the business, Sports Direct affirmed it is on course to meet its goal of 205m in full-year earnings before interest, tax, depreciation and amortisation (Ebitda). Should this happen, some 2,000 employees will be in line to receive shares worth up to 75 per cent of their base salary.

Chief executive David Forsey said the group believed similar share schemes in 2010 and 2011 had significantly boosted staff motivation and retention, and were a "significant contributor" to the group's success. The bonus incentives vest in 2013, but staff must still be working with Sports Direct to receive their windfall.

The retailer has been on a strong run, in contrast with its direct rivals and the wider retailing sector. JJB Sports has been plagued by a long run of misfortune, while even the financially robust JD Sports - which is 13 per cent owned by Sports Direct - has said it is extremely cautious about the outlook for the current year.

Forsey said: "These results continue to highlight the strength of our retail division and the drive from our investment in margin and advertising."