North-East Business
Summer of sports gives hope to JJB
8:00am Tuesday 21st February 2012
THIS Summer's Olympic Games and European football championships are key opportunities for ailing sportswear chain JJB Sports, its chief executive said yesterday.
The survival hopes for the sportswear chain, which narrowly avoided administration last year, have been lifted despite another batch of negative trading figures yesterday.
The group's like-for-like sales were down by 7.6per cent in the 26 weeks to January 29, but this was better than the 17.9per cent decline over the previous half year.
While analysts said JJB still has a mountain to climb, with losses of £60m expected for the year just completed, shares jumped 20per cent yesterday on hopes the figures signal the start of improved trading fortunes.
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.
Its problems stemmed from stock supply issues and intense competition, including from rival Sports Direct International.
As well as slowing the decline in like-for-like revenues - albeit against weak comparisons - the company has been encouraged by the profitability of those sales, with margins up 32.1per cent in the five weeks to January 29.
Chief executive Keith Jones said the retailer's performance was broadly in line with expectations despite challenging conditions.
He added: "As we commented last month, weaker UK employment numbers and the ongoing credit squeeze on consumers create a tough environment.
"However, we are continuing to implement our turnaround aware of the importance of the key trading opportunities afforded by the European football championships and London Olympics."
The group's turnaround scheme involves cutting costs and increasing sales through investing in staff training, upgrading some of its 160 viable stores and improving its ranges.
It has devised plans for three types of stores which will help to tailor its stores to suit their location and will stock more exclusive ranges such as Slazenger Golf and Run 365.