The scale of the turnaround facing JJB Sports, the troubled sportswear retailer, was laid bare yesterday after it posted widening half-year losses and "rebudgeted" for lower sales.
But Keith Jones, the chief executive of JJB Sports, said he "remained confident of JJB's return to profitability and growth", although he reiterated its turnaround could take up to five years.
The group – which narrowly avoided administration in March after implementing an insolvency procedure and tapping shareholders for £96.5m – also said there was no need to raise fresh cash into 2012. But it admitted that Christmas trading will be "very important". Indeed, some City analysts already fear again for its future in a market dominated by Sports Direct.
JJB's four main shareholders – Invesco Perpetual, Crystal Amber, Harris Associates and the Gates Foundation, who together account for 85 per cent of its shares – suffered a fresh blow yesterday, as its shares tumbled by 2.75p, or 19.3 per cent, to 11.5p.
Its pre-tax losses nearly tripled to £66.5m for the 26 weeks to 31 July, hit by restructuring charges of £31m. But it was also dragged down by falling sales and margins, as JJB was forced to discount to clear old and obsolete stock.
The group blamed "previous poor buying" for dire football sales. Mr Jones, who joined in March 2010 from Dixons Retail, said: "The reality is that in those two areas [replica shirts and boots] we did not have a differentiated enough offer." To this end, JJB has hired Ray Evans, the former managing director of Kitbag, as director of football.
Its total revenues tumbled by 22.6 per cent to £142.4m, while they fell by 17.7 per cent on a like-for-like basis. JJB's trading has also deteriorated since the second half of September – leaving it significantly behind the "mid-teens" third-quarter sales growth that it forecast in the fund-raising prospectus.
The group has now re-budgeted for lower second half sales. That said, JJB has slashed its annual rent and business rates bill by £8m, following its exit from 49 stores.
Peter Smedley, an analyst at Charles Stanley, said: "Given that current trading is dire and its impact on cash burn, we are concerned that JJB is becoming financially precarious again."
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