posted a net loss of 167.6 million pounds ($264.6 million) for the year ended
Jan. 25 compared with a profit of 9.6 million pounds for the same period a year
earlier. The company took an exceptional charge of 171.7 million pounds due to
store closures, job cuts and the writedown in value of two shoe chains
purchased last year. Sales fell to 781.3 million pounds ($1.22 billion) from 811.8
million pounds.
stores open at least a year dropped 23.3 percent in the 16 weeks ended May 17
and total sales declined 42.1 percent over the period, the company said. New
merchandise wont arrive until November or December because of the long lead
times in the industry,
JJB
Sports reported group revenue for the 16 week period to May 17 fell 42.1% partly
due to lower stock lower levels resulting from its liquidity issues. On a
like-for-like basis, the total revenue was 23.3% lower. This comprises a 25.8%
decrease in retail store chain revenue and a 7.1% increase in revenue from the
fitness clubs, which were sold on 25 March 2009.
The company said it believed the comp decline “is largely as a result of
low stock levels, the negative publicity which has surrounded the company, and
the current retail environment. As a result of our financial difficulties over
the last nine months the company has had to exist with stock levels
significantly below the previous year. Many suppliers have been reluctant to
supply stock because of the lack of trade credit insurance and the widely held
belief that the company was likely to go into administration. As the lead times
between the ordering of product and its delivery can be up to six months we do
not anticipate any significant improvement in sales until the 4th quarter of
2009.”
JJB has closed 140 stores and sold its fitness club chain in a bid to avoid
liquidation.
The
combined gross margin achieved during the same period was 580 basis points lower
than the comparative period last year.The stock holding in the retail business
is 46.9% lower than at the end of the same period last year. Following the
disposal of the fitness clubs business, the company has been reducing costs to
align its cost base with the sports retail focussed shape of the continuing
group. This process of cost realignment continues.
Update on restructuring and refinancing
The company is currently in the process of a restructuring and refinancing
programme, full details of which were announced on 25 March 2009 and 6 April
2009, that comprises a CVA proposal and, conditional upon the implementation of
the CVA proposal, new financing arrangements. Documentation relating to the CVA
proposal was published on 6 April 2009 and the terms of the interconditional
company voluntary arrangements of the company and its wholly-owned subsidiary
Blane Leisure were approved by creditors and members at meetings held on 27 and
29 April 2009, respectively.
The company currently expects the CVA proposal to be implemented on or around
28 May 2009. Following implementation of the CVA proposal, the new financing
arrangements are expected to become available to the Group on or around 1 June
2009. At this time, the standstill arrangements under which the company is
currently operating will be terminated, historical financing arrangements will
be repaid and terminated and, pursuant to the shareholder authority granted at
the general meeting on 29 April 2009, the company will issue warrants to Bank
of Scotland (BoS), one of the banks offering continuing support, to subscribe
for new ordinary shares representing approx 4.5% of the company's current
shares in issue.
Financial reporting
The Group
said it faces a number of material uncertainties and limitations, including,
but not limited to, the fact that the CVA proposal has not yet been implemented
and could still be subject to a challenge and that the new financing arrangements
do not become available to the Company until the CVA proposal is implemented.
As a result, the Directors are currently unable to conclude on going concern
and accordingly the Company is currently unable to finalise and publish its
full audited accounts for the 52 weeks to 25 January 2009.
However,
mindful of its disclosure obligations as a listed company, the company has
decided to publish its unaudited preliminary results for the 52 weeks to 25
January 2009 today. The Company currently expects to be in a position to
publish its full audited annual financial statements in the first half of June
2009.
Sir David
Jones, Executive Chairman, said: “Our 2008/09 results reflect the
disappointing performance of JJB Sports as the business struggled to re-position
itself in a declining retail environment, resulting in severe operational and
ultimately financial difficulties.”
“Since I
became Executive Chairman in January 2009, we have made significant inroads to
restoring the Group's financial stability – against all the odds – and we have
initiated a strategic path to growth
.
“With our
restructuring progressing very well, we now have the opportunity to revitalise
JJB Sports as a focused multi-channel retail business, specialising in sporting
goods and sportswear. I am confident that the executive management team we now
have in place has the skills and conviction to deliver on that exciting
potential, despite the challenging market conditions we expect in the months
ahead. There is still much to be done but we are determined to succeed and to
serve the best interests of our customers, employees and shareholders.”
