Sports retailer JJB Sports is holding an Emergency General Meeting (EGM) today to discuss the company voluntary agreement (CVA) its management proposed last week.
The details of the CVA would allow JJB to dispose of 45 of its worst performing stores to its unsecured creditors in the next year, with another 50 of its 245-strong store portfolio possibly being sold over the next 24 months.
Along with 75 per cent of JJB’s landlords, 50 per cent of shareholders at the EGM would need to agree to the initiative if the retailer is to proceed.
When announcing the CVA last Friday, JJB Chairman Mike McTighe said: “The board and management team are working urgently on a fundamental restructuring plan which will significantly strengthen JJB’s finances and build on the group’s strengths.
“We are confident that, with the support of our key stakeholders, we can complete this restructuring in the coming weeks.”
JJB conducted a previous CVA in 2009 which saw the offloading of 140 of its stores and was generally credited with saving the business from insolvency.
Yesterday the Association of Business Recovery Professionals R3 warned that retail & wholesale is most at risk of any sector of suffering a large number of insolvencies this year.
Consistently falling sales of recent months forced JJB to renegotiate its credit agreements with Bank of Scotland and make significant changes to its management structure at the end of last year.
Reports over the last week have suggested that opposition to the proposed CVA has already been expressed by some landlords and rival retailers, and it will be interesting to see how the retailer’s own shareholders react to the move today.