JJB Sports Plc reported its first half loss widened due to inventory issues, and any concerns the company may have had were compounded by an investigation by the U.K.’s Serious Fraud Office (SFO) and the Office of Fair Trading to uncover possible wrongdoing. 


Meanwhile, an ongoing spat between Sir David Jones – chairman of JJB – and Mike Ashley- owner of competitor Newcastle United — appears to have been reignited by several seemingly underhanded remarks made by Jones recently. The initial dispute was sparked by a £1.5 m personal loan that went bad earlier this year. The SFO and OFT are investigating both companies regarding allegations of sports retail cartel.


Regarding finances, the U.K. sporting goods chain said sales fell 21.3% to £167 million ($224.8 mm) from £212.6 million ($328.6 mm) a year ago.  The net loss from continuing and discontinued operations was £27.2 pounds ($36.6 mm) in the six months ended July 26, from a loss of £263,000 ($406,461) in the comp period a year earlier. Gross margin in H1 narrowed to 34% of sales from 48.7%.


JJB said its restructuring efforts will allow it to rebuild inventories by the first quarter of 2010.


The 250-store firm, which came close to administration earlier this year, also said it had agreed a further £10 million ($13.4 mm) of new financing with a relaxation of financial covenants.