Sport and fashion retailer JJB Sports has put itself up for sale after it failed to raise new funds to help revamp its stores. The Wigan-based business, which has a staff of nearly 4,000 people and operates 180 stores, warned shareholders
that any rescue deal may see their holdings in the company rendered worthless. Last month JJB said that sales had deteriorated owing to poor weather and weak demand for athleticwear during the European Championships.
said that in the six weeks to 26 August, like-for-like sales had fallen by 3.3 percent. Earlier this year, JJB announced a 30 million pounds investment to help turn around the business, including 20 million pounds from US retailer Dick's Sporting Goods and 10 million pounds from existing shareholders.
In August shares in JJB sank by a quarter after Dick's Sporting Goods said it had in effect written off its entire investment. In a statement, JJB said it had continued talks over fund-raising and the "restructuring of its store portfolio" to enable it to improve trading. "However, following these discussions, the directors do not believe that the company will be able to raise the level of funds required to implement the turnaround," it said.
JJB said it had debts of about 36 million pounds. "Given the level of current debt within the company, there can be no assurance that any proposal or offer that may be made would attribute value to the ordinary shares of the company."
JJB's shares more than halved following the announcement, dropping by 1.64 percent to 0.73 percent.
David McCorquodale, corporate finance partner at KPMG, who is leading the JJB sale process, said: "While it is very early days, I anticipate significant interest in the opportunity to acquire this leading multichannel authentic sports retailer.
Image: JJB Sports