Whelan determined to stay at JJB despite fall in profits

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The Independent Online

David Whelan, the chairman of JJB Sports, sought to quash any lingering bid speculation by declaring yesterday that he was "there to stay" at the company he founded more than three decades ago.

David Whelan, the chairman of JJB Sports, sought to quash any lingering bid speculation by declaring yesterday that he was "there to stay" at the company he founded more than three decades ago.

His comments came as the company, which issued a post-Christmas profit warning, said that underlying sales were still falling amid tough conditions on the high street.

Mr Whelan, who attempted to take JJB private in 2003 and raised more than £10m from share sales last year, said: "I am entirely happy with the way things are set up with JJB and I have no desire at the moment to sell any of my shares." He owns about 7 per cent of the company, while his family controls almost 40 per cent.

Its shares slipped 2.5p to 215.5p after it reported a 26 per cent fall in pre-tax profits to £50.4m. On an underlying basis, pre-tax profits were £63.7m, down from £87.9m the previous year.

Mr Whelan followed rival retailers from Next to Woolworths in warning that life on the high street was a struggle. "Trading conditions are as difficult as any I have known for some years. It is quite clear that consumers have tightened their belts and that this is fuelling competition between retailers." Despite a boost from Easter, underlying sales were 1.2 per cent lower in the 10 weeks to 10 April, although analysts were encouraged by the marginal improvement in the gross margin. The company is budgeting for a similar fall in like-for-like sales during the rest of the year.

After a disastrous few years, which included both the ill-fated foray into fashion sportswear and much-maligned acquisition of the discount retailer TJ Hughes, JJB has decided to return to its sports roots. It is leaving the cut-throat fashion sportswear market, which even the supermarket groups have muscled their way into, to rivals such as the John David Group.

To support its new sporty credentials, the group has branched out into the health-and-fitness market. It has high hopes for its new health clubs, which sit on top of edge-of-town superstores. It has opened 21 so far, but plans to have 39 trading by the end of this financial year. Ultimately it hopes to have more than 200 of the combined club/shops across the country.

The group is putting its share buyback programme on hold while it puts its financial firepower into its leisure club roll out. It is projecting capital expenditure of £60m this year, falling to just £50m the following year.

JJB is still waiting to hear whether an appeal against an £8.4m fine from the Office of Fair Trading for price-fixing replica football kit has been successful. It had made a provision of £2m for the fine, but strongly protests its innocence.

Mr Wigan says he won't sell shares to fund football

David Whelan is Mr Wigan. He owns the town's football and rugby clubs (league and union) and even owns Pooles pies, a local pie-maker. In three decades he has turned the local sports shop, JJB, into a £500m business.

Mr Whelan may be infamous for being the only other businessman - apart from David Webster, the former Safeway chairman - to sell a business to Sir Ken Morrison: Wm Morrison bought six supermarkets from Mr Whelan in 1978 for £1m.

But it is his passion for the beautiful game that most interests the City. The former Blackburn Rovers star owns Wigan Athletic, which is on the verge of making it seriously big with promotion to the Premier League. Normally, such a step would prompt all manner of speculation about whether Mr Whelan would sell JJB to raise cash for new players.

JJB's chairman made it clear yesterday that the £20m-or-so television money and increased corporate revenue that the club stands to receive on promotion would easily tide it over, insisting he had no plans to sell down his family's near-40 per cent shareholding. Whether traders will believe him is another matter.

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