JJB prepares for world cup boost
27 May 2010 09:37
JJB Sports today said its stores were well stocked, ready for the World Cup, but annual results revealed the pain of a difficult year for the company in which it narrowly avoided administration.
The sportswear retailer said underlying pre-tax losses more than trebled to £68.5 million in the 12 months to January 31st - a year that saw JJB agree a rescue deal with its landlords that prevented the need to call in the administrators.
JJB has since recovered and said comparable sales in the 16 weeks of the new financial year were up 7.5%, with revenues in May growing by 19%.
The World Cup tournament also offers a "significant opportunity" to boost business with replica kit sales, according to the group.
In addition, JJB outlined a revival strategy that will widen its focus to all major sporting events and see its store network overhauled as it seeks to reclaim leadership of the £5 billion sportswear market.
The company said it was to begin testing new store formats this summer ahead of a wider refurbishment roll out due to start towards the end of the year and increased investment in its online offering which it said would play a "critical role" in the group's future.
Keith Jones, chief executive of JJB, said: "We cannot pretend that the company's recovery will be either quick or easy.
"There is an enormous amount of work to be done to introduce modern retail standards and disciplines into the business."
However, he added the early signs were encouraging, with a "steady improvement" in like-for-like sales.
The recent trading performance would have been even more impressive, had it not been for the impact of freezing weather at the start of the year, which saw sales drop 2% in February.
Profit margins have improved from 36.8% to 43.6% in the past 16 weeks and it said stock levels - hit amid its crisis last year after suppliers became reluctant to deal with the firm - were nearly double at £105 million.
The group also today confirmed the appointment of former senior independent director John Clare as chairman. Mr Clare – a former boss at DSGi – has been acting in the role since chairman Sir David Jones stood down on health grounds.
Sir David - a veteran of the retail industry after previous roles with Grattan, Next and Morrisons - oversaw the company's rescue after being drafted in last January.
As well as leading the Company Voluntary Arrangement with landlords and creditors, he agreed the sale of JJB's fitness clubs and a City fundraising initiative.
Mr Clare said the group could now "look to the future with cautious optimism".
"We operate in a large and attractive market, estimated to be worth more than £5 billion.
"We have restocked our stores and we are once again making better use of our retail space."
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