Sep 25, 2012
JJB Sports to appoint administrators to sell stores
Sep 25, 2012
Debt-laden British retailer JJB Sports Plc said on Monday it was appointing administrators to sell its assets and brands after failing to receive an offer for the entire company, threatening thousands of jobs.
A familiar sight on Britain's high streets with about 180 stores and 4,000 employees, JJB has been battling falling sales and stiff competition from larger rival and aggressive discounter Sports Direct International Plc.
Sports Direct is seen as a potential bidder for some JJB stores.
The company, which put itself on the block on Aug. 30, said it expects to announce that it has sold its assets and brands within the next few days. Shareholders will not get any return on their investment.
"The next announcement of the actual appointment (of administrators) will coincide with a sale of the company," a spokesman told Reuters.
Stores remain open pending a sale but it is not clear how many of them will survive or the impact on employees.
"At the moment they all remain employed as before, there is no major change at the moment, but it obviously depends on what announcement ... in terms of the sale, in terms of how many stores and various aspects," the spokesman said.
Speculation that JJB could head towards administration was sparked after a key shareholder, U.S. retailer Dick's Sporting Goods, wrote off its recent 20 million pound ($32.51 million) investment in the company.
Wigan-based JJB has revamped its top management in recent months, including the appointment of a new chief executive and the hiring of turnaround specialist Robert Corliss as its deputy chairman.
The company, which has been reporting losses since 2009, also said sales this year were hit by unusually wet weather in April and June in Britain.
Its shares, which were valued at roughly 300 pence each about three years ago, have lost virtually all their value to close at 0.4 pence on Friday.
JJB's shares, which were suspended on Monday, will remain suspended until a further announcement about the administration process from the company.
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