Sportswear retailer JJB puts itself up for sale

Directors of the Wigan-based company, which throughout 2012 has been rocked by funding issues, falling sales and stiff competition, said they did not believe that the company would be able to raise the new funds required to stage a turnaround.

A formal sale process would begin, the company said, adding that organic sales slipped 3.3 per cent in the six weeks to August 26.

“Given the level of current debt within the company, there can be no assurance that any proposal or offer that may be made would attribute value to the ordinary shares of the company,” said JJB.

JJB, which has 180 stores and employs 4,000 people, has been involved in a long-running survival battle after a slump in sales and a string of profit warnings.

The company secured its most recent lifeline just four months ago when it landed £20m from US retailer Dick’s Sporting Goods and a further £10m from existing shareholders.

It earmarked £20m of the most recent funding on converting 60 of its most important stores in 2012 and 2013 into a new format that during trials produced much-improved sales and margins.

But it admitted last month that continued poor trading meant it would need additional funds for the programme sooner than it had expected.

JJB has held discussions about securing further funds and restructuring its store portfolio but said today it now believed it will not be able to raise the level of support required to implement the turnaround.

It added: “As a result, the board has decided to conduct a formal sale process of the company and now wishes to invite offers to support further investment in the company, which may result in a sale of the company or its assets.”

JJB has debts and outstanding loans totalling £36m.

Matthew McEachran, a retail analyst at Singer Capital Markets, said JJB’s big rivals Sports Direct and JD Sports Fashion were now poised to pick up a chunk of the store estate.

He said: “On the assumption that a sale is unlikely, the next step is likely to be administration which will inevitably see capacity withdrawn via closures, albeit not necessarily of the entire business.”