JJB Sports has continued to struggle with a poor stock position as it battles on in its survival fight.
The troubled sports retailer suffered a pre-tax loss of £42.9m in the six months to July 26, as revenues plummeted 42.5% to £178.6m. This compared with a loss of £14.8m the year before.
JJB Sports is continuing to look at options to raise finance, including the disposal of further non-core assets, an extension in the maturity date of its current working capital, or an equity capital raising. The retailer is also seeking a new chief executive.
Investec analyst Katharine Wynne believed JJB would seek new equity finance to support its long-term needs. She warned: “In our view this requires clarity on the management situation. We think a ‘name’ with brand management experience would be desirable as chief executive, as this is one area that the current team is lacking.”
Names linked to the chief executive role include former Original Factory Shop boss George Foster and former JJB boss Tom Knight.
JJB had already admitted it would not get significant new stock until the second half. In the first half, supply was limited because of supplier fears the retailer would collapse.
JJB’s poor stock position led to like-for-like declines in the first four weeks of its second half of 37%.
Seymour Pierce analyst Kate Heseltine said: “Such extreme negative like-for-likes have been largely attributable to stock shortages. The bigger brands, Nike and Adidas, operate on six- to nine-month lead times and other suppliers have been reluctant to maintain supply through such turbulent times.”
Chairman Sir David Jones said it was unlikely that improving stock levels would have any impact on JJB’s performance until the start of the next financial year.
JJB remains committed to its “serious about sport” positioning and believes it is well placed to take advantage of what it sees as a gap in the market between the value position of Sports Direct and the fashion-focused strategy of JD Sports Fashion.
JJB confirmed that the Serious Fraud Office (SFO) was investigating JJB and Sports Direct’s activities in connection with suspected offences. However, it said that the SFO has not contacted it directly and that the investigation would be focused on “certain individuals” rather than the company.
Separately, former JJB chief executive Chris Ronnie said he has not been contacted by the SFO and did not expect to be.