JJB’s lifestyle division finally succumbs to administration

STRUGGLING sports retailer JJB Sports is to appoint administrators to its lifestyle division.

A notice of intention to appoint administrators has been filed in court for subsidiaries Original Shoe Company, a branded clothing and footwear retailer with 64 stores, and Qubefootwear, which has 13 stores.

Richard Fleming, David Costley-Wood and Blair Nimmo of KPMG will be instructed as the administrators for both companies.

“The board of JJB remains hopeful that a third party may become interested in acquiring the businesses,” the company said in a statement.

In January the company said attempts to sell the loss-making businesses, which suspended chief executive Chris Ronnie bought for £1 last year, had not been a success and that both the lifestyle brands would be either closed or rebranded.

Earlier this morning, JJB shares had soared to 14.25p after the group confirmed it has received a number of bids for its gym chain but shares slid back to 12.25p following the administration announcement.

JJB is understood to last week have received first round bids for its gyms, put up for sale to help pay off a £60m loan to banks. Bids, including one from former JJB chairman Dave Whelan, are believed to be between £35m and £55m.

The sale, being handled by investment bank Lazards, is seen as a major challenge on a number of levels.

Sources close to the situation say the first issue is that the gyms are co-located with JJB stores in the same building, and share a lease, meaning that if the retail business were to fail, a question mark would be placed over the gyms.

It is understood too that until very recently the health clubs arm did not even have its own bank account or VAT registration number.

In a statement JJB said: “The company notes the recent press speculation regarding the progress of the possible disposal of its fitness clubs business. The company confirms that it has received a number of non-binding indications of interest for this business and that discussions are continuing.

“There can be no certainty that any of these indicative indications of interest will result in a transaction or as to the terms of any such transaction. A further announcement will be made when appropriate.”