JJB Sports is to focus on protecting its margins this year as it seeks to stem its losses.
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The beleaguered sports retailer reported that losses before tax almost tripled to £181.4m in the year to January 30. Adjusted operating losses totalled £73.9m, up from £67.3m. Total sales edged up from £361.1m to £362.9m but margins decreased by nearly 4% to 34.4%.
JJB chief financial officer Dave Williams said: “It’s a tough retail environment, our focus is to protect and maximise our cash margin.”
The retailer blamed its increased losses on poor stock availability and bad buying decisions. JJB said it was unable to re-stock to adequate levels in its second half due to a lack of working capital, which left the business on the brink of administration. Like-for-likes in the second half fell 1.5% compared with a 14.4% rise in its first half.
JJB said the £65m cash injection from its shareholders, approved last month, has enabled it to buy new stock. But chief executive Keith Jones said: “Buying was flat, it wasn’t done well enough. We had 13 derivatives of one Adidas shirt, that doesn’t make sense.”
Jones said the buying issue has been resolved by strengthening the team and re-training staff. Its current year first-quarter performance met board expectations, with like-for-likes down in the mid-teens.
The retailer warned that its turnaround, which will involve a revamp of stores, will “not be easy or quick” and has set a three-to-five-year timetable.
Jones said JJB wants to introduce new brands to differentiate stores from competitors. It is also working with suppliers including Nike and Adidas to secure exclusives, as well as ramping up its own brand.