JJB flotation will net up to pounds 10m for chairman: Retailer hopes to raise up to pounds 20m - Group will extend chain

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The Independent Online
DAVID Whelan, chairman of the sports equipment retailer JJB, will receive pounds 7m to pounds 10m when the company he founded floats on the Stock Exchange in the summer writes Robert Cole.

Promoters of JJB's float expect it to have a market capitalisation of pounds 50m. Between pounds 15m and pounds 20m of new money will be raised.

Half the proceeds will be for development of the business and half will go to Mr Whelan.

Mr Whelan, a former professional footballer who played for Blackburn Rovers in the 1960 FA Cup Final, said yesterday that he had taken little out of the company in dividends since he established it in 1973. He has no pension arrangements and plans to use part of the flotation money for a pension.

JJB has 107 outlets selling sports footwear, clothing and equipment. Mr Whelan said: 'We concentrate on goods which are intended to be used in sport, rather than on fashion leisurewear.'

JJB's product range is dominated by five brand lines - Reebok, Adidas, Nike, Umbro and Puma. About one third of sales is in clothing and another third in shoes. Twenty per cent is from the sale of replica kits of rugby and soccer teams.

The business was started in Wigan and sponsored the local rugby league side until last season, when it sponsored the Orrel Rugby Union team.

The shops are in the North-west, the Midlands and Scotland. JJB also owns five stores in Spain. The company plans to use its share of the proceeds to extend the chain by 30 shops a year and Mr Whelan's ambition is to operate 400 outlets.

The company increased sales by 18 per cent to pounds 34.3m and made operating profits up 38 per cent at pounds 3.3m in the year to 31 January 1993.

Charterhouse Tilney, the stockbroker, estimates that turnover for the year to 31 January this year increased another 27 per cent to pounds 43.5m and trading profit moved ahead to pounds 4.5m.