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.