BREAKING NEWS: JJB to axe 50 stores in fresh CVA move
TROUBLED North West retailer is planning to close 45 underperforming stores and may axe a further 50 as part of a radical cost saving drive.
The Wigan-based group, which currently has more than 250 stores, and is in early-stage takeover talks with Bury-based JD Sports Fashion, is seeking a second Company Voluntary Arrangement with shop landlords in as many years to allow it to go ahead with the restructuring.
Without approval, JJB – which has more than 6,000 staff – warned it may face administration.
JJB chairman Mike McTighe said: “The board and management team are working urgently on a fundamental restructuring plan which will significantly strengthen JJB’s finances and build on the group’s strengths.
“We are confident that, with the support of our key stakeholders, we can complete this restructuring in the coming weeks.”
The company expects to shut 45 stores in the next 12 months and keep 50 on review for two years, but has identified 150 branches which are “core” to its future.
The properties which fall under the CVA plans for closure represent 40% of annual rent payments, JJB said.
The CVA will require approval from shareholders and involves reducing rent for stores set for closure and paying rent on these stores monthly rather than quarterly.
The company warned that it will “no longer be able to trade as a going concern which would result in the appointment of receivers, liquidators and administrators” if it did not secure the CVA.
