Sources close to the situation told Retail Week that some of the retailer’s landlords called in the bailiffs because of unpaid rents and nervousness over JJB’s ability to pay after it sent post-dated rent cheques.
It is thought that JJB owes at least£500,000 on empty stores for which it still has liability under lease. Landlords are thought to be seeking a statutory demand for outstanding payments, which gives the retailer 14 days to pay before a creditor can initiate bankruptcy proceedings.
Sources said that the news raises yet another question mark over the retailer’s cash flow.
A JJB spokesman said: “We’ve paid our rent in full and in a timely manner with all our operational stores, and we are in negotiations with a handful of stores where we have ceased trading.”
In the past fortnight, JJB’s share price has plummeted to as low as 19p. The freefall began when JJB reported a loss of£10 million in its first half, compared with profits of£8.3 million for the same period the previous year.
The results also revealed a dispute with HBOS, which had claimed the sports retailer had breached its banking covenants.
In its statement accompanying the results, JJB’s auditors said: “There are material uncertainties that may cast significant doubt on the group’s ability to continue as a going concern.”
Last week it emerged that Coface, the UK’s largest credit insurer, had pulled its cover for JJB suppliers.
Following the financial turmoil that engulfed the Icelandic banks, Icelandic investor Exista – which in partnership with chief executive Chris Ronnie holds a 29 per cent stake in JJB – downplayed speculation that it would bail out the retailer.
Despite selling its holding in Nordic insurance business Sampo, Exista’s executive chairman Lydur Gudmundsson said: “There are no plans to sell other assets.”
1 Reader's comment