JJB wields the axe on stores in slump

Apr 16 2008 Evening Gazette

RETAIL chain JJB Sports could not confirm this morning whether its decision to close 72 stores would affect its Tees-based outlets.

JJB, which has more than 400 stores including six on Teesside, confirmed it was planning to shut 72 stores by the end of the month as it looked to recover from a sharp drop in profits.

In preliminary results for the 52 weeks to 27 January, operating profits fell to £11.3m from £39m last year, while total revenues for JJB stores and fitness clubs for the seven weeks to March 16 were 3.5% lower than the same period last year.

JJB blamed “difficult market conditions” and falling sales of replica kits.

JJB began implementing the closure plan earlier this year after a review of the business by new management.

It said the stores in question were unlikely to make any “significant contribution” to group profits and that many were already close to newer and larger stores in its estate.

The moves were announced as JJB said adjusted profits fell 28% to £33.8m in the year to January 27. A £25m hit relating to the cost of closing the stores meant bottom-line profits fell 72% to £10.8m.

The changes are being overseen by Chris Ronnie, who became chief executive of the Merseyside-based group in the summer after founder David Whelan left the business and sold his family’s holding to a joint venture formed by Icelandic financial group Exista.