JJB Sports has appointed retail veteran John Clare as senior independent non-executive director and announced a slump in first-half sales.
JJB is active in its search for a new chief executive, it said. Once a chief executive is appointed, Sir David Jones will become part-time chairman.
JJB announced at its AGM in Wigan today that retail revenue for the 25 weeks to July 19 dropped 40.4 per cent year on year.
Like-for-like sales slumped 26.5 per cent due to low stock levels. The figures are in line with forecasts announced on May 21.
Successful Sale clears stock
During JJB’s summer Sale, which ran from June 23 to July 15, the retailer sold at cost £15m of product that “no longer fits with our merchandising strategy” as planned. The retailer said the Sale was “highly successful” in clearing out old and slow-moving stock.
Gross margin during the 25 weeks to July 19 was 11.2 per cent lower than last year. During the Sale period, margin dropped 25 per cent. Stock levels are 57.7 per cent lower than at the end of the same period last year.
JJB said that it expects a “gradual improvement” in sales as new stock comes in and boosts gross margin. However, any benefit is unlikely to affect sales until the fourth quarter of 2009, due to six-month lead times.
JJB has repaid its short-term loan facility of £25m with Barclays Banks ahead of its maturity on August 31.
The retailer is still reviewing options to secure extra capital for the group, including disposals of non-core assets. It has completed the sale of its remaining helicopter to Dave Whelan’s DW Sports and its joint venture in the Kooga brand to JD Sports.
Loan saga rumbles on
JJB is braced for a showdown at the AGM today, with Sports Direct founder Mike Ashley or his representatives set to quiz the JJB board over the timing of a controversial £1.5m loan made by Ashley to Jones.
JJB said: “An unfortunate testament to the success of the board in saving the company from near certain administration in the first half of 2009 has been the number of personal attacks on Sir David, in particular in relation to the loan provided by Mike Ashley to Sir David for investment in Advanced Network Technologies.
“Following publication of details of the loan, that has now been fully repaid by Sir David, the company believes that a number of factually incorrect and defamatory claims have been made with a view to destabilising the company just as the board attempts to rebuild the group’s business. These allegations have all been refuted.”
The retailer reiterated that the loan arrangement was made before Jones joined the company in September 2007, which Ashley refutes. Jones joined the board in October of that year.
Non-executive directors Roger Lane-Smith and David Beever will retire from the board today.