Feb. 11 (Bloomberg) -- JJB Sports Plc, an unprofitable U.K. sporting goods retailer, said its future depends on landlords and unsecured creditors approving a restructuring of its properties that would allow it to close at least 45 stores.
That company voluntary arrangement depends on raising capital after JJB’s current 31.5 million-pound ($50.4 million) share placing and on continued bank facilities, the Wigan, England-based company said in a statement on Regulatory News Service. The second funding attempt will probably need to be bigger than the current one, the company said.
If JJB’s biggest shareholders and the creditors won’t back the new arrangement, or the company is unable to raise more finance, it will “no longer be able to trade as a going concern” and receivers, liquidators or administrators would be brought in, the company said in the statement.
JJB said today it may close as many as 45 “significantly underperforming” stores and consider shutting another 50. JJB needs new funds plus the creditor arrangement to help it survive after saying weak holiday sales mean it’s likely to breach banking covenants.
JJB fell 0.13 pence, or 2.9 percent, to 4.38 pence in London. The shares have fallen 76 percent over the past 12 months, giving it a market value of 28.5 million pounds.
The company needs more than 75 percent of unsecured creditors in terms of value to agree. About 150 outlets are “core to the group’s future,” the company said.
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