Sports retailer JJB has suffered a slump in interim profits and poor second half trading has forced a re-budgeting.
JJB Sports said that if trading does not improve, full-year performance will be worse than originally expected.
The retailer reported a pre-tax loss of £66.5m – a 177.1% decline on the comparable figure last time – on sales down 22.6% to £142.4m. The adjusted operating loss for the period to July 31 worsened 62.1% to £35.5m. Like for like sales plummeted by17.7%.
JJB said that punishing trading conditions in the UK towards the end of the second quarter affected sales and it “re-budgeted for the second half on a lower sales base but with the benefits of additional cost savings”. In August and September results were “marginally ahead of the re-budget at the end of these two months despite the performance having deteriorated in the second half of September”.
JJB chief executive Keith Jones insisted that progress is being made at the business. He said: “Despite the consumer environment being extremely challenging and expected to remain so for the foreseeable future, our re-sized store portfolio and other cost-saving initiatives have allowed us to manage the business and maintain tight financial controls.
“Our focus on people and processes is yielding early wins and with the continued hard work from colleagues across the group, I remain confident of JJB’s return to profitability and growth.
“Our results for the half year have been impacted by the closing of unprofitable stores and the sell-out of old and obsolete stock. Despite the tough trading climate, the business is in better shape than of late and has the opportunity to develop the JJB proposition into a truly authentic sports retailer over the next few years.”
* JJB has appointed Ray Evans as director of football. Evans, most recently managing director of etailer Kitbag, will join JJB in the New Year.
JJB said: “Ray is one of the leading e-commerce executives, with an in-depth knowledge of the sports retail markets, working with a range of sports clubs on an international level.”