The troubled sportswear retailer JJB has taken a massive step towards safeguarding its future and 12,000 jobs after the majority of its creditors approved of its company voluntary arrangement.
An overwhelming 99 per cent of creditors voted in favour of the CVA, an insolvency procedure which it will use to compensate landlords for the 140 retail stores it plans to close.
If, as expected, JJB secures a 50 per cent approval vote from shareholders tomorrow, it will get access to a new short-term £25m loan with Barclays and a medium-term £25m revolving facility with Bank of Scotland.
JJB, which had about £60m of debt at its year end in January, sold its fitness chain to JJB's founder, Dave Whelan, for £83.4m in March to help it reduce its debt mountain. Landlords voted against the separate CVA proposed by Stylo, the parent of the Barratts and Priceless shoe chains, earlier this year, partly over fears that it could set a dangerous precedent for other ailing retailers to try to shed unprofitable stores.
But Ian Parish, the head of retail at Atis Real, an international property consultancy, said: "I don't think it is the start of a flood of other retailers coming forward with similar proposals."