Several parties are understood to have expressed interest in taking control of JJB Sports, which formally put itself up for sale this morning following continued dismal trading.
It is understood that interest has come from both private equity and trade.
Names of potential bidder have not been disclosed. However, industry sources believe those likely to cast their slide-rules over the embattled retailer include restructuring specialists Hilco, OpCapita, GA Europe and Better Capital. US retailer Dick’s Sporting Goods, which invested £20m in the retailer back in April, could also make a play to snap up the chain.
The decision to put itself up for sale follows acknowledgement by JJB that it would be unable to raise sufficient funds to go ahead with turnaround plans, and so dire is the retailer’s situation that its shares may be worthless.
JJB Sports has hired adviser KPMG to oversee the sale process, but the retailer warned that there is no certainty an offer will be made.
The retailer has suffered for several years at the hands of arch-rival Sports Direct, and the decision to seek a sale follows several attempts to restructure, including two CVAs.
JJB disclosed a further sales slide. In the six weeks to August 26, like-for-likes declined by 3.3% while like-for-like cash margin crashed by 9.5%. The retailer is carrying net bank debt of £16.5m, has another £18.75m of outstanding convertable loan notes and has drawn down £1.1m under a trade loan facility.
The retailer said: “Given the level of current debt within the company, there can be no assurance that any proposal or offer that may be made would attribute value to the ordinary shares.”
KPMG corporate finance partner David McCorquodale, who is leading the JJB sale process, said: “While it is very early days, I anticipate significant interest in the opportunity to acquire this leading multichannel authentic sports retailer. There is a real place on the British high street for a retailer of performance gear for the sports enthusiast.”
Turnaround specialist Bob Corliss will still become chairman from September 1 and will steer the sale process.