JJB seeks more funding following 8.7% fall in sales
Struggling sportswear retailer JJB Sports has announced that it is in talks to receive a further round of funding following poor summer sales.
The retailer said it had entered discussions with “strategic partners” to accelerate the timing of additional funding required to implement its turnaround plan.
In the 24 weeks ending 15 July, group like-for-like sales fell by 8.7% while cash margin decreased by 16.6%. JJB said the company had suffered due to the unseasonably wet weather in May and June, and from poor sales of replica football kits during the Euro 2012 Championships.
The retailer said it had refitted five stores this year which, since their refurbishment, had all shown an uplift in sales and cash margin compared to the rest of the estate. In view of that, JJB said its board would like to accelerate the refurbishment programme but cash constraints currently made that impossible.
Never Miss a Retail Update!In a statement the company said: “In light of the deterioration in trading, the directors have sought to implement a combination of management initiatives, which were identified in the 2012 results, and have been successful in mitigating the trading and cash shortfall to a certain extent. However these actions have not fully mitigated the shortfall.”
“As a consequence, and in light of the continuing poor macroeconomic environment, the level of future headroom on working capital facilities and financial covenants will be significantly reduced in the short and medium term.”
JJB also confirmed that Bob Corliss, who was appointed as deputy chairman/chairman elect with effect from 9 July, was working with the management team to review ways in which the group’s trading performance could be improved in the short and medium term.
Corlis said: “There is a lot of work to do, and we have hit the ground running. We are continuing to work collaboratively with our business partners to address the challenges faced by JJB. I am excited to work with a brand that has a strong heritage in such an important market.”
