JJB Sports put itself up for sale Thursday morning after strategic partners declined to invest more money in the failing UK retailer to help it continue its restructuring. The company said that since announcing efforts on July 19 to raise more capital, comp store sales had decreased 3.3 percent and gross margins had decreased 9.5 percent.
JJB has hired KPMG LLP to advise it during the formal sale process, but said there was no guarantee it would find a buyer and that its shareholders could be wiped out.
“Given the level of current debt within the company, there can be no assurance that any proposal or offer that may be made would attribute value to the ordinary shares of the company,” reads the company’s press release. “The Board will update the market as to the status of the process in due course.”
Bob Corliss will assume the role of Chairman Sept. 1 to lead the company through the sale process while Mike McTighe will remain on the board of directs as a non-executive director.
As at 28 August 2012 net bank debt was £16.5 million. In addition, the company has £18.75 million of Convertible Loan Notes outstanding and has also drawn down £1.1m under the trade loan facility.
Dick’s Sporting Goods took a $32.4 million charge in the second quarter to write off the value of its 3.3 percent stake in JJB, which it acquired in April.
JJB now operates in most major towns and cities of the UK as well as on the internet and other channels. JJB also has stores in the Republic of Ireland. JJB's stores are increasingly of a superstore concept, which average 11,000 square feet of selling space and in which full product ranges can be better displayed. The product ranges include sports textiles, footwear, replica shirts, equipment, accessories, cycles and golfing products.
