Sports retailer JJB Sports is proposing a second company voluntary agreement (CVA) in as many years after reviewing its store portfolio, it was announced today.
All of the retailer’s 245 existing stores have been split into three categories during the review; 45 of which are significantly under-performing, 150 are seen as key to the company’s future plans, and another 50 currently under-performing stores which could remain a key part of the group.
The CVA proposes that the 45 worst stores are closed or sold in the next year and that the other 50 under-performing stores are considered for disposal in the next 24 months.
For the CVA proposal to be accepted more than 75 per cent of the unsecured creditors of JJB and 50 per cent of the company and its wholly owned subsidiary Blane Leisure Limited’s shareholders need to vote in favour at a specially arranged meeting.
Mike McTighe, JJB Chairman, said: “We have today announced key details of the proposed restructuring of our store portfolio, one of the crucial steps in restructuring JJB.
“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.”
JJB has come under mounting pressure in the last few months due to a prolonged fall in trading.
In December the retailer announced plans to raise £30 million in capital, made significant changes to its management structure and confirmed that it was likely to break credit agreements with the Bank of Scotland due to an unexpected fall in sales.
During its first CVA conducting in 2009 the company closed 140 of its stores and talks have already been conducted with its major landlords, representing 40 per cent of the group’s annual rental payments, regarding this latest proposal to cut back on outlet numbers.
McTighe added: “We are confident that, with the support of our key stakeholders, we can complete this restructuring in the coming weeks.”