JJB’s new rescue bid launched

JJB HQ
JJB HQ
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BELEAGUERED JJB Sports has launched a major fund-raising initiative to speed its recovery.

The Wigan-based sportswear retailer is bidding to find an extra £30m in order to get it through the critical new year trading period.

It has also announced that chairman John Clare, the former chief executive of Dixons Retail, is leaving. He was appointed at the beginning of the year on the understanding that he would only fill the vacancy until a permanent chair could be found.

He will be replaced by Mike McTighe, previously head of global operations at Cable and Wireless.

It is understood that a contributory element in Mr Clare’s decision to depart was that both he and Keith Jones, JJB’s chief executive, have a retail background while Mr McTighe has a pedigree in turning companies around.

Dave Williams is the new chief financial officer, replacing Lawrence Coppock whose departure was announced earlier this year.

The Martland Mill company has been beset by problems over the past five years and has been one of the poorest performing retailers on the stock market.

Its shares, which traded as high as 260p in 2007, closed at 4.3p on Thursday.

Earlier this month JJB said it expected to breach the terms of its bank borrowings next month following slower-than-expected sales in November.

JJB also said this month that it was actively engaged in constructive discussions with Halifax Bank of Scotland in relation to the future financing of the business.

The company will raise the new cash from shareholders including Harris Associates, Crystal Amber and the foundation of Microsoft founder Bill Gates.

A JJB spokesman said: “Each of the company’s key stakeholders welcomes the steps taken by management to strengthen the short term financing of the business and each has expressed its continued support for the business.

“In particular, the company remains an important strategic partner of Adidas group and Nike, who remain supportive of JJB Sports and its future plans.”

The company had to secure its future via a previous capital raising. In 2009 JJB went through a Company Voluntary Arrangement, which is an alternative to administration under which it came out of the leases of 140 stores, paying the rents on a remaining 250 shops on a monthly, rather than quarterly, basis.