JJB wins breathing space from banks but sales slide again
STRUGGLING North West retailer JJB Sports today revealed a further fall in sales, but said it had been given breathing space by its bankers to reduce its debts.
The Wigan company, which has had a disastrous year and seen a 90% slump in its stock market value, said like-for-like sales in its core sports stores during the 19 weeks to December 7 were 8.9% lower than last year. This compares with a like-for-like sales fall of 5.6% for the 34 weeks to September 21.
Sales in the health clubs division, which JJB looks set to sell, were up 6.7% in the period.
The company said margins were up, but because of the tough market conditions it had started its festive sale early, two weeks ago.
It said its hopes of meeting market forecasts on profits would “depend on continuing the good sales performance in the traditional January sales period”.
Talks are continuing over the sale of the fitness clubs and other non-core assets and businesses, the firm said. Former chairman Dave Whelan is thought to be one of the parties bidding for the gyms business.
The sale of the fitness clubs is being handled by investment bank Lazards.
JJB said a potential approach for its loss-making LifeStyle arm, which trades as Qube and The Original Shoe Company, had come to nothing.
On the matter of its finances JJB said its lenders, Barclays, HBOS and Kaupthing, had agreed that the Kaupthing £20m bridging facility need not be repaid in full by Sunday, but £20m would be repaid pro rata across the three banks today.
“The banks are continuing constructive discussions with the company and are reviewing the company’s plans and forecasts with a view to agreeing a basis for providing continuing support,” a statement said.
Roger Lane-Smith, chairman of JJB, said: “During the period we have made good progress on a number of fronts in the face of the difficult trading conditions that have afflicted the entire high street.
“The economic outlook is challenging but I am confident that the work we are doing will put JJB in the best possible shape to trade through it.”
