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Shares in JJB Sports, the lossmaking sportswear retailer, fell by a quarter as its chairman quit and it warned sales had been much lower than expected despite the European Football Championships.
JJB blamed the performance on disappointing demand for replica football kits during the Euro 2012 championships and the poor summer weather. Sales in established stores unexpectedly fell 8 per cent in the 22 weeks to July, putting paid to the group’s hopes of restoring profitability, while net debt rose to £15.4m from £11.3m in January.
Mike McTighe, who became chairman 20 months ago, will be replaced by Robert Corliss, the US chief executive of menswear company Robert Talbott. Mr Corliss will initially join the JJB board as deputy chairman before taking over as chairman in September.
The news marks a further deterioration in the fortunes of the Wigan-based group which a little over a year ago staved off administration by raising £65m from its shareholders and negotiating a Company Voluntary Agreement with its landlords.
The group’s shares, which were trading at the equivalent of more than £20 five years ago before three fund raisings and a share consolidation, fell another 25 per cent on Monday to 7.38p.
Hopes of a turnround for JJB were refuelled in April when Dick’s Sporting Goods, the US retailer, invested £20m in the company in exchange for a seat on the board and a stake of about 3 per cent. Dick’s also secured the right to buy £20m of convertible loans next year that would take its shareholding to 61 per cent. Other shareholders put up another £10m.
But on Monday Freddie George, analyst at Seymour Pierce, said he was forecasting pre-tax losses of £32m for 2013 and that he did not expect the company to break even until 2015 at the earliest.
Mr George said: “It does appear likely … that the company, in view of the losses forecast, will require further investment in the business.”
Peter Smedley of Charles Stanley agreed: “JJB’s medium-term predicament remains largely unresolved,” he said. The poor weather and weak demand for Euro 2012 paraphernalia may have played a part, he said, but “we think that part of this underperformance is due to unprecedented price-driven competition from Sports Direct in the lead-up to and during the tournament”.
JJB is owned 47 per cent by fund managers Invesco, with a further 29.5 per cent of the shares in the hands of Harris Associates. The Bill & Melinda Gates Foundation owns another 5 per cent.