JJB Sports to Close 72 Stores…

JJB Sports Plc announced plans to close 72 of its 410 stores and cut 800 jobs while reporting an expected 28.5% slump in fiscal 2007 underlying pretax profit. The U.K.-based sports retailer and health clubs group also revealed a disappointing start to its new year, with comp sales down 3% and gross margin nearly 100 basis points lower over the seven weeks to March 16.


For the year ended Jan. 27, JJB earned a profit before tax and exceptional items of £33.8 million ($75 million) – in line with recent guidance but down from £47.2 million ($94 million) the prior year. After taking a £25 million ($49.8 million) restructuring provision for the store closure program, pre-tax profit crashed 71.9% to £10.8 million ($21.3 million.) Full-year revenue was up 0.2% at £811.8 million ($1.6 billion).


JJB also announced that David Greenwood, the group's finance director for the last 30 years, will step down at the end of the month but remain as company secretary until July 27. He will be succeeded as finance director by David Madeley, the current commercial director.


About The Author

Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

JJB Sports to Close 72 Stores

JJB Sports Plc plans to close plans to close 72 stores and cut 800 jobs as it reported an expected 28.5 percent slump in full-year underlying pretax profit.


 


The U.K.-based sports retailer and health clubs group, which currently operates about 410 stores, also revealed a disappointing start to its new year, with like-for-like sales down 3 percent and gross margin nearly 100 basis points lower over the seven weeks to March 16.


 


'Whilst we expect current difficult market conditions to continue to affect consumers in the short term, we believe the action we are taking represents a turning point for the company, which will benefit performance over the medium term,' said chairman Roger Lane-Smith in a statement.


 


For the year to Jan. 27, JJB earned a profit before tax and exceptional items of 33.8 million pounds ($75 million) — in line with analysts' consensus forecast but down from 47.2 million pounds last time.


 


After taking a 25 million pound restructuring provision for the store closure programme, pretax profit crashed 71.9 percent to 10.8 million pounds ($21.3 million.)


 


The 72 stores set to close currently employ about 1,200. Of these employees, 400 will be re-assigned within JJB's store portfolio. Seven of the 72 stores will converted to 'Original Shoe Company' stores.


 



Full-year revenue was up 0.2 percent at 811.8 million pounds ($1.6 billion), while the full-year gross margin was up 250 basis points to 50.0 percent, reflecting higher margins on footwear and replica kit revenue and an increased contribution from fitness clubs.


 


JJB also announced that David Greenwood, the group's finance director for the last 30 years, will step down at the end of the month but remain as company secretary until July 27. He will be succeeded as finance director by David Madeley, the current commercial director.

About The Author

Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

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