JJB warns on losses
31 October 2011 09:46
Troubled sportswear retailer JJB Sports warned today it faces a number of critical trading periods as it plunged even deeper into the red.
The 195-strong store group said pre-tax losses widened to £66.5 million in the 26 weeks to July 31st from £24 million a year ago as total sales slumped by more than a fifth to £142.4 million.
The Wigan-based group said trading conditions were worse than expected and remain "extremely challenging", and added that the losses were worsened by a huge sale to clear old stock and the costs of closing 41 stores.
Chief executive Keith Jones said trading deteriorated further in September and October and if current trends continue, the year-end performance will be worse than expected.
Mr Jones said the business, which employs 4,500 staff, faces a number of critical trading periods, including Christmas, the January sale and next year's European football championships and Olympics.
Commenting on the interim results, Keith Jones, CEO, said: "Despite the consumer environment being extremely challenging and expected to remain so for the foreseeable future, our re-sized store portfolio and other cost-saving initiatives have allowed us to manage the business and maintain tight financial controls. Our focus on people and processes is yielding early wins and with the continued hard work from colleagues across the group, I remain confident of JJB's return to profitability and growth.
"Our turnaround plan is now firmly established in the business and good progress has been made in a number of key areas, however there is much still to do.
"Our results for the half-year have been impacted by the closing of unprofitable stores and the sell-out of old and obsolete stock. Despite the tough trading climate, the business is in better shape than of late and has the opportunity to develop the JJB proposition into a truly authentic sports retailer over the next few years."
In other news, the company has appointed Ray Evans, former managing director of Kitbag, as director of football. He will take up his role in the New Year.
Commenting on the appointment, Keith Jones said: "I am delighted to welcome Ray as our new Director of Football. Ray has unrivalled experience in the sports retail markets and has worked with some of the largest sports clubs, on an international and national level, to enhance their retail offering. He has an impressive track record and I very much look forward to working with him as we focus on delivering growth for our Football business."
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