Britain's biggest sporting goods retailer Sports Direct reported an 18 percent rise in recent sales as customers caught London Olympics fever and kitted out children for a return to school.

The group, which owns Sports Direct.com and Lillywhites stores as well as brands such as Slazenger, Lonsdale and Dunlop, said on Wednesday group total sales in the nine weeks to September 30 had risen to 402.7 million pounds ($642 million), up from 341.3 million pounds a year ago.

Gross profit in the period rose 21.7 percent to 167.4 million pounds, with the firm adding that trading since September had remained strong.

Sports retail sales grew 16.8 percent to 344.7 million.

Retailers across Britain are generally struggling as consumers' disposable incomes are squeezed by rising prices, muted wages growth and government austerity measures.

Sports Direct has, however, coped well, benefiting from the woes of its rivals, its value offer, a growing internet presence, highly motivated staff due to a lucrative bonus scheme and European expansion.

In October the firm bought 20 stores and nearly all the stock of rival JJB Sports after it fell into administration and closed the bulk of its stores, axing 2,200 jobs in the process.

The group is targeting for 2012-13 underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of 270 million pounds, before a charge for bonus share schemes.

Shares in the firm, controlled by billionaire Newcastle United soccer club owner Mike Ashley, closed at 404 pence on Tuesday, up 74 percent on a year ago, valuing the business at around 2.5 billion pounds.

(Reporting by Neil Maidment; editing by Kate Holton)