JJB to increase promotions to keep policy on track

The group, which last year stayed afloat thanks to a restructuring deal with landlords, described trading conditions since the start of August as volatile and warned sales were likely to fall back without stimulation.

The promotional strategy for the autumn and Christmas period has been backed by the company's main lender Bank of Scotland, which has waived a covenant test due next month so the company can press ahead with its plans.

At the start of its three-year turnaround, JJB said it reduced losses for the six months to August 1 to 24m, from 42.9m a year earlier.

Like-for-like sales from continuing operations rose 14.4 per cent as the company's 'Serious About Sport' strategy and improvements in product availability helped deliver evidence of "steady" progress.

However, the increase in same-store sales slowed to 6 per cent between August 30 and September 26 as JJB highlighted the current volatility in trading.

Despite the sales pressure, chief executive Keith Jones said JJB's turnaround potential remained in its own hands.

He added: "As I indicated shortly after my arrival in March this year, the turnaround of JJB Sports will not be a quick fix, but will take up to three years to deliver."

JJB added that the World Cup produced a sales performance in line with expectations.

The company's results were also on target but the comments on recent trading alarmed investors as JJB shares fell.

Panmure Gordon stockbrokers revised down its forecasts to reflect volatile trading and a lower-than-expected gross margin.

However, the broker drew encouragement from the company's store refurbishment plans following the successful trial of an out-of-town store in Slough.

While ranges are consistent with the wider group, changes have included better store navigation, improved product positioning and a new point of sale area. The company is extending the lessons from the Slough trial to carry out refits at Wakefield, Northampton, Leicester Fosse Park, Enfield and Bath.

All will be open by the end of October.

The Wigan-based firm trades from 249 JJB branded retail stores in the UK and Ireland and employs more than 7,000 people.

Shares last night closed down 1.45p at 9.55p.