The king is dead, long live the king! Sports Direct boss Mike Ashley might sometimes resemble the chaotic but loveable King Ralph. But dominion over UK leisurewear has passed to Stephen Rubin, the unassuming chairman of JD Sports’ controlling shareholder Pentland Group. News that Pentland reduced its JD stake to 55 per cent sent JD shares down a 10th at one point on Wednesday. Even so, JD remains the best performer in the FTSE 100 index, which it entered this year.

Mr Rubin has picked an opportune moment. Before Wednesday’s dip, JD shares were trading at an all-time high, valuing the group at almost £9bn. At 20 times forward earnings, the valuation is pricing in a successful turnround at recently acquired US retailer Finish Line. That is optimistic.

Mr Rubin has built a stable of leisure and clothing brands as Mr Ashley has, but quietly. Sales at Pentland, which include outdoor label Berghaus and Speedo swimwear grew 40 per cent last year to £5bn. That comfortably eclipses Sports Direct’s £3.7bn, which rose just a 10th.

Line chart of Share prices (rebased) showing UK sports retailers

Foreign expansion is driving growth at Pentland. JD hopes that Finish Line and its almost 1,000 outlets will double operating margins of 4 per cent and boost gross margins to 46 per cent within four years. JD’s own gross margins were close to 48 per cent versus 43 at Sports Direct last year.

Column chart of Market share (%) showing UK sports retailing

JD’s relationship with big brands such as Nike and Adidas is key to its success; JD gets the latest trainers and tracksuits before competing retailers. But these big brands are increasingly selling through their own outlets. In the US, Foot Locker’s share of Nike sales has been eroded by direct sellers over the past decade, say analysts at Stockviews. Foot Locker shares have lost more than a quarter so far this year and trade at a single-digit multiple, a steep discount to JD.

JD has ascended to its throne as Britain’s king of trainers. That role will be harder to replicate in the US, a republic.

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