JD Sports has walked away from a possible takeover of ailing Wigan rival JJB.
The trendy sportswear retailer, whose current fortunes have little in common with the Martland Mill-based firm, had been sizing it up for a merger which would have created Britain’s largest retailer.
The implications for Wigan jobs were not clear as there had been much talk of JD’s moving from Bury to Wigan because of JJB’s superior headquarters and warehousing facilities, whereas there was bound to be employment overlaps on the high street.
But all that is immaterial after JD yesterday announced it would not be making an offer, adding that it had requested details from Wigan about restructuring but received none. JJB replied that the proposals hadn’t looked sure enough to succeed and were highly conditional.
It is the latest chapter in the story of a firm which is still trying to stave off the threat of administration.
Shareholders have already agreed to raise more than £31m through a share sale but still have to get a majority of store landlords to agree to a second company voluntary agreement which would reduce rents and make payments monthly rather than quarterly.
JJB has also recently announced its intention to close 43 underperforming stores - including outlets in Leigh, St Helens and Bolton’s Middlebrook retail park and has a further 46 under close scrutiny for the next two years before deciding whether they too should be axed. That would leave just 150 JJB “core” stores across the country.
As far as the takeover talks were concerned, JD said it had asked JJB for details of a proposed restructuring of JJB’s property portfolio through a company voluntary arrangement, but that it “received no further information whatsoever from JJB Sports.”
On the basis of the information it could garner from JJB’s public announcements, JD decided not to make an offer.
JJB issued a statement last night which said the board considered JD Sports’ indicative proposal to be “highly conditional and lacking sufficient certainty to be deliverable.”
Chairman Mike McTighe added: “We welcome today’s clarification from JD Sports.
“JJB’s restructuring continues as planned with the whole management team focused on and committed to delivering a stable standalone future for JJB and its employees.
“The board remains confident that with the support of our stakeholders we can achieve a successful turn-around of the business.
“The company currently expects to provide further details of its revised business plan, anticipated funding requirements and proposed financing arrangements on or around March 15.”