Landlords support rescue package for JJB

The sportswear group received critical support for its survival plans that will see it close 43 unprofitable stores, place a further 46 under review and move to monthly rental payments.

More than 75 per cent of JJB’s creditors – the majority of which are landlords – and over 50 per cent of shareholders approved a controversial company voluntary arrangement (CVA), an alternative to administration.

The move offers hope for the future of the battered chain and its 6,100 staff.

Mike McTighe, chairman of JJB, said the vote demonstrates the “solid support” for its turnaround.

He added: “We would like to thank our landlords and creditors who have supported the company in this crucial vote. As a result, the management and the vast majority of our colleagues now have the opportunity to work alongside all stakeholders as we continue to achieve essential milestones in our turnaround.”

Landlords have forfeited a significant amount in lost rent as part of the CVA. They are likely to receive between 25p and 29.2p in every pound they are owed, although this compares with just 1p if the company fell into administration.

Under terms of the deal, JJB offered landlords of stores which are shut a sweetener of up to £7.5m in cash or shares in two years, depending on its performance.

But the British Property Federation (BPF), which represents landlords, warned that yesterday’s vote should not be seen as a “green light” for retailers to dump failing stores.

Liz Peace, chief executive of the BPF, said: “Landlords treat each CVA on its merits and JJB is a business undergoing significant changes.

“This is not an opportunistic dumping of stores, rather a genuine attempt at rescuing the business, and should not be seen as a green light for other retailers to restructure their portfolios via a CVA at the expense of both landlords and their competitors.”

Hopes for the CVA were boosted in recent days when two of its biggest landlords, Peel Holdings and Hammerson, said they would vote in favour of the scheme.

Its chances of success also increased when it emerged that JJB’s largest creditor, a company called Blane Leisure, is also a subsidiary of the group.