19 July 2012 10:37
JJB Sports has begun talks to secure more rescue funds after poor summer trading derailed its hopes of a turnaround.
JJB has started talks with "strategic partners" about the funds needed for overhauling stores that it had thought would not be required until early next year. The move comes just three months after the chain landed £20 million from American retailer Dick's Sporting Goods and a further £10 million from existing shareholders, such as the Bill and Melinda Gates Foundation.
Its plight has deteriorated in recent weeks after poor weather and weak demand for replica kits resulted in a disappointing Euro 2012 for the Wigan-based retailer.
Like-for-like sales were down by 8.7% in the 24 weeks to July 15th, although stores refurbished under its turnaround programme performed much better. Future refits are now under review because of the funding squeeze.
Retail turnaround specialist Bob Corliss, who previously ran The Athlete's Foot, a franchise-based footwear business, joined the company earlier this month and is working on ways to improve the performance.
He 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."
The company, which trades from 180 stores and employs 4,000 people, has been hit by competition from high street and internet rivals including Newcastle United owner Mike Ashley's buoyant Sports Direct International.
Last year, JJB was forced to secure £96.5 million in funds from major shareholders, as well as announce plans to close 43 unprofitable stores and place a further 46 on review in a bid to stave off administration.
It earmarked £20 million of the most recent funding on converting 60 of its most important stores in 2012 and 2013 into a new format that during trials produced much-improved sales and margins.