JJB Sports to Shut Most of Its Stores as Rescue Attempts Founder
JJB Sports Plc (JJB), a U.K. sporting goods retailer, will close most of its stores with the loss of about 2,200 jobs after attempts to rescue the business failed.
A total of 133 outlets will be shut, with the remaining 20 being acquired by competitor Sports Direct International Plc, (SPD) according to a statement from KPMG LLP, which was today appointed as administrator to the Wigan, England-based company.
JJB, founded in the 1970s by former professional soccer player David Whelan, has struggled to cope with increased competition from supermarkets and rivals such as Sports Direct. Dick’s Sporting Goods Inc., the largest U.S. athletic chain, in August wrote off a 20 million-pound ($32 million) investment it made in April. Last year, JJB twice raised money from investors, refinanced its debt and avoided going into administration after reaching agreement with landlords and other creditors.
An auction process for the retailer attracted interest from more than 100 parties and led to eight first-round bids from trade and private-equity buyers, David McCorquodale, the KPMG corporate finance partner who led the sales process, said in a statement. Most were put off by the amount of cash and further restructuring that would have been required, he said.
Sports Direct said it will pay 23.77 million pounds for the 20 stores, most of JJB’s inventory and the Slazenger golf brand licenses, as well as the freehold property in Wigan. A further sum of as much as 0.25 million pounds will be payable after a stock take.
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