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09 July 2012 10:12
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Hopes of a turnaround at JJB Sports were dealt another blow today, after the retailer failed to receive the boost it expected from the Euro 2012 championships.
The Wigan-based group, which came close to collapse last year before striking a partnership with American retailer Dick's Sporting Goods, suffered an 8% fall in like-for-like sales in the 22 weeks to July 1st. This marked a deterioration on the 5.7% decline in its first quarter as it failed to cash in on the normal sales uplift ahead of a major football tournament, whilst the wettest April and June on record further dampened demand.
Dick's, which has more than 500 stores in the United States, agreed to invest an initial £20 million alongside £10 million from existing shareholders, such as the Bill and Melinda Gates Foundation.
JJB said £20 million of the funding would go towards converting 60 of its most important stores in 2012 and 2013 into a new format that during trials produced much-improved sales and margins.
The group also announced today that Mike McTighe will step down as chairman in September after "20 intense months". He will be replaced by retail turnaround specialist Bob Corliss, who previously ran The Athlete's Foot, a franchise-based footwear business.
JJB had hoped store overhauls would start to bear fruit in time for the Euros and the Olympics, which had been seen as major opportunities for the sector.
Mr Corliss, who has been appointed to further accelerate the company's turnaround, said: "JJB has been through some difficult times yet it is clear that there is a real market opportunity for a national authentic sports retailer here in the UK.
"JJB can be that retailer and I'm energised by the prospect of leading the company through the next phase of its turnaround."
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.
