JJB Sports’ creditors and shareholders have approved the struggling sports retailer’s CVA proposal.
The retailer said more than 75% of its unsecured creditors, the requisite amount needed to approve the CVA, had given the go ahead to its plan to shed 43 of its stores over the next year. Full details of the vote will be revealed later today.
JJB Sports chairman Mike McTighe said: “I am delighted that our CVA proposals have been approved at the creditors’ meetings held earlier today. JJB continues to develop strong relationships with its landlords who have supported the company in this process, and we look forward to working with them, alongside all our stakeholders, as we continue to achieve crucial milestones in our turnaround.”
Its shareholders also approved the CVA at a meeting held at 2.00pm today.
JJB chairman Mike McTighe said:“This further demonstrates the solid support for the company’s turnaround. We would like to thank our landlords and creditors who have supported the Company in this crucial vote.”
The struggling retailer needed its CVA to be approved to stave off administration. It offered landlords some form of kickback when JJB’s fortunes turned around, meaning big name companies such as Hammerson and Peel Holdings supported the proposal.
Hammerson managing director UK retail Lawrence Hutchings said: “This is a positive outcome for consumers, landlords and investors. We are conscious however, that the hard work in turning JJB around starts today. We look forward to working with JJB, as with all our retailers, to drive sales and footfall at our shopping centres and retail parks to our mutual benefit.”
However, some landlords were still frustrated over the fact this is JJB’s second CVA in two years. Capital Shopping Centres said earlier this month it would not approve the CVA.
Richard Fleming, UK Head of Restructuring at KPMG, which carried out the CVA, said: “While the CVA is but one element of JJB’s plan to turn its fortunes around, it is a vital cog in the mechanism that will put the business in a stronger operational position and, ultimately, avoid administration. The proposal process has given both the company and its creditors the opportunity to agree a compromise that is mutually acceptable. We estimate that the landlords accepting a reduced rent can expect to see a substantially larger return via the CVA than in the alternative of administration: 24.6p to 29.2p in the £1 versus 1.1p in the £1.”