JJB Sports’ chairman Mike McTigue has warned the successful restructuring of the retailer could take up to five years after it made an operating loss of £181.8 million for the 12 months to January 30.
Like-for-like sales during the period increased by 5.9 per cent and revenue increased slightly to £362.9 million, but the overall decline in gross margin reflected the poor stock packages available to the business and the need for promotional sales initiatives to drive footfall and clear stock during the second half of 2011.
On the positive side, JJB’s investment in six redesigned stores resulted in sales 16 per cent above the company average, while the retailer also reported an improvement in its online business.
“Since the period end, a great deal has taken place,” says McTigue.
“We have delivered two further fundraisings and agreed a significant CVA with our landlords that gives the company a real chance of recovery.
“However, this is the beginning of the hard work and not the end.
“The financial restructuring was completed on schedule by the end of April and since then the operational restructuring has progressed well.
“Underperforming stores have closed as part of our CVA, and head count and operating costs have been significantly reduced.
“Whilst the sales environment remains challenging, management’s prudent controls mean that business performance in the first quarter has met the board’s expectations.
“The fundraising in April also provided us with the funds to refurbish our store portfolio, following the success of last year’s trial.
“A further 150 stores are targeted for refresh or refit in the current year, with 50 targeted for 2012/13.
“The retail environment is challenging, will remain so for some time and we face intense competition.
“But the work undertaken over the past six months, together with the crucial support of all our stakeholders, have given JJB a chance to survive and ultimately to prosper, and I look forward to working with our management team to make this happen.”
