JJB turnaround could take five years, says McTighe

JJB’s new chairman Mike McTighe has warned that the latest attempt at restructuring the business could take up to five years.

In an interview with the Mail on Sunday  Mr  McTighe said that if the Company Voluntary Arrangement (CVA) the retailer is seeking is voted through, there also needs to be a change in culture at the business.

“I keep telling people this is three-to-five years,” he said. “I have to set realistic expectations. This cannot be fixed in six months.”

“I’ve looked at the people, systems and processes in this place and I’ve come to the conclusion that the weakness is the people.”

JJB completed a £31.5m capital raising exercise last month, without which the company would have gone into administration, Mr McTighe said.

It is now planning a second CVA process in as many years and needs 75% of its creditors by value to support the plan. The bulk of the creditors are the landlords of its stores.

The proposed CVA involves JJB shutting 43 of its stores within the next 12 months, with a further 46 being placed under review – potentially closing within two years.

It is also proposing to reduce rents to 55% of current levels and moving from paying rents on a quarterly to a monthly basis. It has also pledged incentive payments to landlords if future targets are met.

Bury-based JD Sports Fashion – which has performed exceptionally well in recent years as JJB has declined – is considering making a takeover bid for its Wigan-based rival.