JJB delivers disappointing update

The sportswear retailer launched the price offensive for the autumn and Christmas period as part of a bid to protect its "Serious about Sport" turnaround strategy from the impact of challenging trading conditions.

However, JJB said that sales were lower than expected between late September and last weekend after a rise of 13.1 per cent on a like-for-like basis.

This was in line with the trend over the rest of the financial year as JJB said trading conditions were having a negative impact on its expectations.

Despite the company's peak trading period still to come, City analysts now expect JJB's losses to be around 40m in the year to January 31. Shares slumped 23 per cent in the wake of today's disappointing update.

Freddie George, a retail analyst at Seymour Pierce stockbrokers, said he remained concerned about the strength of JJB's recovery.

He added: "The 'Serious about Sport' strategy is sensible but with competition intensifying and competitors, in particular Sports Direct, adapting similar strategies, we remain sellers of the stock."

Katharine Wynne, an analyst at Investec Securities, added that JJB's failure to attract customers into its stores despite its promotional efforts was "ominous" given the prospect of another consumer downturn.

The group, which last year stayed afloat thanks to a restructuring deal with landlords, required its main lender, Bank of Scotland, to waive a covenant test in order for the promotional push to go ahead.

JJB has also embarked on a major store refurbishment programme. Changes introduced at outlets at Wakefield, Northampton, Leicester, Enfield and Bath have included better store navigation, improved product positioning and a new point of sale area.