Dick’s writes off £20m JJB Sports investment

THE US retailer which pumped £20m into ailing JJB Sports earlier this year has already written off the value of its investment.

Dick’s Sporting Goods gave Wigan-based JJB a lifeline in April when it made a strategic investment in the company, but since then it has continued to struggle amid tough trading and disappointing sales, particularly from the Euro 2012 competition.

Dick’s position regarding its JJB stake was revealed as it announced a $32.4m impairment charge for the second quarter.

Chairman and chief executive Edward Stack said: “As we indicated art the outset, this is a high-risk investment that was structured to provide us with meaningful upside and capped downside.

The US group said it has no further funding obligations to JJB – which said last month it will need further investment amid continuing difficult trading conditions .

Recent reports have suggested that Crystal Amber, one of the group’s biggest shareholders, will buy JJB’s bank debt from Lloyds and implement its own turnaround plan.

Veteran private equity investor Jon Moulton’s Better Capital has also been linked with JJB.