UK: 2,000 jobs go as JJB Sports falls into administration
By Katie Smith | 1 October 2012
Around 2,200 jobs have been lost as troubled sportswear retailer JJB today (1 October) collapsed into administration after failing to restructure the business or find a buyer for it stores.
The move comes as little surprise since the company put itself up for sale at the end of August after its directors admitted they did not believe the chain could raise the necessary funds to implement a turnaround.
Despite saying it had received offers to acquire parts of the business, the Wigan-based company appointed KPMG partners Brian Green, David Costley-Wood and Richard Fleming as administrators.
KPMG has managed to sell 20 JJB stores to rival retailer Sports Direct, along with the brand and website, for a cash consideration of GBP23.77m (US$38.4m). The move helps to safeguard 550 jobs in the UK.
But JJB Sports says the net proceeds of the sale will be used to repay its outstanding debt.
The remaining 133 stores will close, while some 167 employees have been retained to assist the administrators.
"Successive attempts to restructure the business, both financially and operationally, have not been enough to prevent the company falling into administration," said Richard Fleming, UK head of restructuring at KPMG.
"We will now be reviewing what options are available for the remainder of the business, such as selling leasehold interests."
David McCorquodale, corporate finance partner who led the sales process, added: "In spite of the severity of financial distress suffered by the business, we spoke with over 100 parties in the first few days of our appointment; with eight trade and private equity players tabling first round bids."
Trading at the troubled sportswear chain came in below expectations in July following of poor sales of football replica kits linked to the European Football Championships, and unseasonably wet weather.
Sectors: Apparel, Finance, Retail
Companies: JJB Sports, Sports Direct
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UK: 2,000 jobs go as JJB Sports falls into administration
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