JJB Sports looks healthier as sales show improvement

The company, which now has 195 sites after closing a number of unprofitable stores, said like-for-like sales increased five per cent in the four weeks to Boxing Day, albeit against a weak performance the previous year.

JJB said the performance was broadly in line with expectations, but pointed out that trading during the January sales, European football championships and London Olympics would be key to its revival in the year ahead.

Last year, JJB was forced to secure £96.5m in funds from major shareholders, as well as announce plans to close 43 unprofitable stores and place a further 46 on review in a bid to stave off administration.

Its problems stemmed from stock supply issues and intense competition, including from rival Sports Direct International.

Yesterday’s performance means like-for-like sales decreased by 7.8 per cent in the 21 weeks to Boxing Day, compared with a 17.7 per cent slump in the six months to July 31.

Margins fell by 3.2 per cent, against 31.7 per cent in the first half of the year.

The company’s market value still languishes at below £20m.

Freddie George, retail analyst at Seymour Pierce stockbrokers, said the current update was “against very easy comparatives” and the company is “running out of time to turn this business around”.

He added: “It needs to find a clear niche and a format, which is differentiated from its competitors to take advantage of the forthcoming sporting events.”

He expects the company will make pre-tax losses of £60m and will not break even for another two years at best.

The group’s turnaround scheme also involves cutting costs and increasing sales through investing in staff training, upgrading some of its 160 viable stores and improving its ranges.

It has devised plans for three types of stores which will help to tailor its stores to suit their location and will stock more exclusive ranges such as Slazenger Golf and Run 365.

JJB, which counts America’s richest man Bill Gates among its major shareholders, said like-for-like sales for the 47 weeks to December 26 fell 13.5 per cent, with cash margin down 20.8 per cent.

JJB trades from nearly 200 UK stores competing with larger rival Sports Direct as well as supermarkets and online retailers.

JJB, which came close to collapse last year, said its net funds had fallen to £17m even though it had raised £97m over the past year to fund a turnaround plan.

Shares in JJB have fallen 88 per cent over the last year.