Barclays pursues JJB’s Lifestyle arm

LAWYERS representing Barclays Bank are involved in a dispute with the administrators of JJB Sports’ collapsed Lifestyle division.

The Lifestyle arm consisted of the retail chains Original Shoe Company and Qube Footwear which both went into administration in February.

According to an administrators’ report both businesses were required to transfer cash from trade sales into a Barclays account which held £747,000 when the administrators were called in.

Barclays is now claiming this cash against a £55m debt owed by the Wigan-based JJB Group. This figure is part of an £83.2m funding package provided by a syndicate of banks including Barclays, Kaupthing and HBOS.

Administrators at KPMG dispute the claim and have called in their own lawyers to, “liaise with Barclays’ legal advisors”. In the meantime the money is being held in a third-party escrow account.

Without this cash there was around £2.5m in the two businesses, with £2.2m held by the Original Shoe Company. But with combined trade debts of £3m unsecured creditors are not expected to receive anything.

Both the Original Shoe Company and Qube were loss-making when JJB acquired them in December 2007 and July 2008 respectively. But JJB failed to turn them around and an attempt to sell them did not attract, “acceptable offers”, said KPMG.

When administrators were appointed in February 433 of the division’s 842 staff were cut and 44 of the 77 shops were shut. The administrators traded down the remaining branches and by March 30 there was only one Qube shop and five Original Shoe outlets.