Struggling JJB 'out of intensive care'

Sportswear retailer JJB revealed today that its fight for survival in the first half of the year caused losses of £42.9m but said the firm was now "out of intensive care".

JJB saw a year-on-year increase in losses of 189 per cent for the six months to 26 July as stock shortages hurt sales and it tried to get back on its feet with restructuring and refinancing efforts.



The company narrowly avoided administration thanks to a deal with landlords and said today that recent sales figures were showing signs of improvement.



Executive chairman Sir David Jones said he had "aged 25 years" as the firm struggled in the first half of the year.



"We are still alive and we are still kicking," he said.



The 246-store company is in the process of a wide-ranging "serious about sport" turnaround involving a focus on equipment rather than fashion and using partnerships with big name brands.



Sir David said the Wigan-based company was "out of intensive care but it is probably in recovery".



But there were signs that the recovery plan remains touch and go as today's report said JJB could still resort to further asset sales, shareholder fundraising or business restructuring should it fall into difficulties again in the future.



It stated that while the firm believes it is able to continue trading and will meet its financial obligations for the foreseeable future, "relatively small variations" in the assumptions underlying its forecasts could lead to funding shortfalls or a breach of its banking facilities.



"The directors have concluded that these conditions represent a material uncertainty which may cast significant doubt upon the group's ability to continue as a going concern and therefore the group may be unable to continue to realise assets and discharge liabilities in the normal course of business," JJB said.



The company said it has secured £10m in additional financing from its lender, Bank of Scotland, while its loan terms have been relaxed.



But this is only a working capital facility, allowing the firm to rebuild stock levels but not available to be invested in its turnaround plans.



Suppliers have been reluctant to deal with the firm following its high profile troubles and Sir David said stock levels would not be back to normal until the first quarter of next year.



The firm drew hope from an upturn in trading since the end of the first half, with like-for-like sales down 37 per cent in the four weeks to 23 August, moving to a 28 per cent decline in the following four weeks.



Sir David said JJB would also benefit from a slew of sporting events - including the football World Cup next year and Olympic Games in 2012.



"Every major sporting event has to be free advertising for JJB," he said.



And he vowed that JJB would not imitate its rivals in the high street sportswear market.



"JJB is not a fashion retailer like JD Sports and we are not going to be a discounter," he said.



The firm is now planning to cater more for "sports enthusiasts, runners, people who want to keep fit".



Stores will be divided into sections related to different sports as well as gym and fashion areas.



JJB hopes to capitalise on the involvement of brands in staff training and open days.



It gave the example of the Birmingham half marathon next month. Before the race, visitors to stores can have their technique scrutinised by Adidas and Nike representatives.



"We have a gap that we are going to fill and I think that gives us a marvellous opportunity because no one else is doing it in a national way," Sir David said.



Earlier this month JJB said it had blown the whistle to the competition watchdog on alleged cartel activity in the sports retail market and the firm, along with Sports World owner Sports Direct International, is now involved in a Serious Fraud Office (SFO) investigation.



Today JJB said the SFO has confirmed its inquiries were focused on "the activities of certain individuals" rather than the company.



It also stressed that it would be protected from prosecution because of its immunity under the Office of Fair Trading's leniency programme for whistle-blowers.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific