SURVIVING workers in Wigan’s troubled JJB Sports empire face even greater uncertainty after the company reported figures that were even worse than expected.
Despite a radical store closure programme, several refinancing operations and hundreds of job losses, the once mighty business’s fight for survival is far from over as it plunged even deeper into the red.
Its chief executive, Keith Jones, was today defiantly upbeat, saying that he remained confident in the Martland Mill-based firm’s ability to return to growth.
But the figures make for grim reading and one analyst said today that “times was running out” for a turn-around.
There is no mention of further redundancies in the report but dozens of stores are already living on borrowed time after under-performing and being given less than two years to boost fortunes.
Wigan’s MP Lisa Nandy said the business was facing difficult times and called on the Government to take measures that would boost the economy in general and struggling firms like JJB in particular.
The 195-strong store group said pre-tax losses widened to £66.5m in the 26 weeks to July 31 from £24m a year ago as total sales slumped by more than a fifth to £142.4m.
The company said trading conditions were worse than expected and remain “extremely challenging”, and added that the losses were worsened by a huge sale to clear old stock and the costs of closing 41 stores.
Mr Jones said trading deteriorated further in September and October and if current trends continue, the year-end performance will be worse than expected. He added that the business, which employs 4,500 staff, faces a number of critical trading periods, including Christmas, the January sale and next year’s European football championships and Olympics.
Shares in the retailer fell by 20 per cent on the results, which analysts said missed even scaled-back market forecasts.
Football sales in general were poor and the group has appointed a new head of football, Ray Evans, who until recently was managing director at football kit specialist Kitbag.
Freddie George, an analyst at Seymour Pierce, now expects losses this year of £60m and does not now expect the company to break even until 2014 at best.
He said management is running out of time to turn the business around and must find a format that is different from its competitors to take advantage of forthcoming sporting events.
Cash at the end of the half-year was £17m, even though JJB raised £96m through two fund-raisings during the period, both of which were supported by the firm’s four biggest shareholders including the Bill and Melinda Gates Foundation.
It also restructured its property through a deal with its landlords, which involved hefty costs in the period but will save £8m in rents.
At the beginning of the year dozens of under-performing JJB stores - including the one in Wigan’s Grand Arcade - were given a maximum of two years to improve sales or risk the same fate as those now already axed.
Representatives of the GMB union, which represents much of the JJB headquarters workforce, were today unavailable for comment.
Ms Nandy said: “It has been a difficult year for JJB employees and it is in their interests and everyone in the town that JJB bounces back.
“The Chancellor needs to come up with a plan B which will help companies flourish. When you have got really reduced spending power in the population this is the worst time to be in the position JJB is in. There has to be a boost for the economy.”