Game over for JJB Sports as administration looms
JJB SPORTS shares were suspended today ahead of the ailing Wigan-based company being placed into administration.
The company, which has around 180 stores and 4,000 staff, said it had not been able to agree a solvent deal, despite hoisting the ‘For Sale’ sign on August 30.
Despite talks with several parties the company said: “The board has determined that any sale of the trade, assets and brands will be effected through an administration process.”
The company said it expects to apppoint three KPMG corporate recovery experts: Manchester-based Brian Green and David Costley-Wood, and national head of advisory Richard Fleming as joint administrators.
JJB said it will continue to trade all its stores through the administration “pending completion of a sale process.”
A statement said: “The company currently hopes to be in a position to announce a sale of the trade, assets and brands of the group within the next few days.
“A further announcement will be made in due course.”
The company has strugged since 2007 with a raft of trading, managerial and financial problems.
Commenting on JJB’s predicament Julie Palmer a partner at Begbies Traynor, the insolvency firm: “The ailing retailer has faced a number of hurdles which have had a huge impact on the business: operating in an increasingly competitive sector with the rapid growth of competitors such as Sports Direct and JD Sports, as well as tough retail conditions.
“Its future seemed increasing bleak as a large number of its outlets continued to be loss making, despite undergoing a restructure last year which allowed the business to shed a number of non-profitable stores.
“A sale is likely to feature a ‘cherry picking’ approach for the more profitable store leading to the closure of more than a half of its outlets and the loss of more than half of the 4,000 jobs. As the workforce if predominantly young, this will be another blow to youth unemployment figures.”
:: A trading note filed this morning reveals that an investor named Mohamed Fayed bought 3% of JJB’s shares on Thursday when the shares were worth around 0.3p each. In a trade on Friday he bought a further 11 million shares taking the stake to 5.6%. It is not known whether this is the former Harrod’s owner Mohamed Al-Fayed.
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