Sports retailer JJB has reported a pronounced drop in sales while describing allegations that security guards under its employ had 'tailed' a representative of Sports Direct boss Mike Ashley as 'ludicrous'.
JJB Sports has reported retail revenue in line with forecasts in the 25 weeks to July 19th and said that sales and margins should improve in the fourth quarter. Underlying sales fell by 40.4%, with like-for-like sales down by 26.5%, with the sales fall “almost entirely a result of low stock results”.
The group said its gross margin was 11.2% lower than the same time last year although it expects a “gradual” improvement in sales as net stock is received, which will also improve gross margin. However, JJB cautioned that the long lead times between ordering product and delivery, which can be up to six months, will not result in “any significant improvement in sales until the fourth quarter of 2009”.
JJB added that it is continuing to review possible avenues to provide additional capital for the group, including an extension of its working capital facility beyond September 2010, a possible equity raising and disposal of further non-core assets. To that end, JJB has recently completed the sale of the group’s remaining helicopter to DW Sports.
In other news, Roger Lane-Smith and David Beever, who have both been non-executive directors of the company for over nine years, will retire from the board. The retailer also announced that John Clare, the former DSGi chief executive, has been appointed to the board as a senior independent non-executive director. The search for a new chief executive is continuing and following an appointment, Sir David Jones will become part-time chairman.
It has also been reported that the ongoing antipathy between JJB and Sports Direct boss Mike Ashley has taken a turn for the bizarre. According to The Sunday Times Mr Ashley is to issue legal proceedings against JJB after one of its security guards hired for its AGM allegedly ‘tailed’ one of Mr Ashley’s representatives in a dangerous manner on the M61 motorway. An official statement from JJB indicated that Mr Ashley’s representative had been politely asked to leave at the end of the AGM and had done so. “It was wholly appropriate that he was asked to leave because he was offering to show photographs of JJB stores that he had obtained illicitly”, said a JJB spokesman. “It was also wholly appropriate that a representative of JJB’s competitor was on the premises for no longer than was necessary”, he added. JJB firmly denied any knowledge of or complicity in any wrong doing regarding, saying: “We have no knowledge of anyone tailing the representative. He was not threatened or intimidated in any way whatsoever. This is getting ludicrous”.
