JJB Sports’ lifestyle division will cease to exist “within weeks” as executive chairman Sir David Jones ploughs ahead with attempts to turn around the embattled retailer’s fortunes.
Troubled JJB’s problems mounted further when it emerged on Tuesday that an investigation had been launched into the transfer of shares held by chief executive Chris Ronnie.
It transpired that his 27.5 per cent stake, bought through investment vehicle Guro Leisure, was transferred some time ago to the administrators of his backer, Kaupthing.
Ronnie told JJB he was “not aware of the date or place of the relevant transaction or of the price per share in respect of the transaction”.
Jones initiated an investigation into JJB’s share ownership structure to try and improve the business’s transparency when he took up his role two weeks ago. JJB has appointed legal advisers to investigate the matter further, as well as the whereabouts of a 1.3 per cent stake sold on to an unidentified buyer.
Sources close to the situation believe the share ownership controversy, which has been compared to the scandal that engulfed Carphone Warehouse co-founder David Ross, could bring an end to Ronnie’s career at JJB.
JJB reported on Wednesday that it was heading for a loss of up to£10m this year. Like-for-like sales, excluding Original Shoe and Qube, fell 6.8 per cent in the five weeks to January 11.
Jones said that he has been given breathing space by JJB’s bankers to achieve a sale of the retailer’s health clubs business. A sale, which could take as long as three months to complete, is seen as key to JJB’s survival.