JJB Sports chiefs admit buyout is possible

JJB Sports, the UK's biggest sports retailer, said a management buyout was a possibility yesterday, though it said there were no active discussions.

Dave Greenwood, the finance director, said: "Obviously with the share price where it is everyone always asks us whether we are thinking about an MBO. It would be wrong of us not to be considering a whole range of options. But it is not at the front of our minds."

Almost 40 per cent of JJB's shares are held by founder Dave Whelan and his family, though analysts said a buyout would not be popular with minority investors with the shares at such a low point.

The comments came as JJB reported a sharp fall in half year profits, having brought forward its results by a day after the death of its chief executive, Duncan Sharpe.

Mr Greenwood said JJB was in mourning after Mr Sharpe's suicide but that Mr Whelan, the company's chairman and Mr Sharpe's father-in-law, was committed to rejuvenating the group. "These things affect people in different ways but Dave is the strongest," he said. "He's fired up and has said that there will be a period of mourning but that business has to carry on."

JJB said it planned to trial a new store format in the run-up to Christmas. Called "icon", the stores will trade from smaller JJB outlets, which the company might otherwise close. It plans a trial of three branches but could open at least 20 if successful. The stores will be run by the new operations director, Tom Knight, who was head of the sports retail division of Blacks Leisure.

The company declined to say whether Mr Knight might be a future chief executive.

JJB's interim results showed a drop in half year profits to £39.6m from £47m the previous year. This was due to lower margins in a more competitive market and £240,000 of losses of TJ Hughes, the discount department store group acquired for £40m in April. The group admitted that it had lost market share to a rejuvenated Marks & Spencer and Philip Green's Bhs. Increasing competition is also coming from Asda's George clothing label.

JJB said it has submitted its response to the Office of Fair Trading regarding its investigation into replica football shirt prices.

The company said its new "JJB teamwear" launch in August had been successful. This supplies amateur football clubs with 14 shirts, shirts and socks for £220, or £185 for juniors.

Schroder Salomon Smith Barney cut their share price target to 140p from 195p. The shares closed up 7.5p at 143.5p.