Healthier after JJB health club sale
SHARES in ailing sportswear chain JJB Sports jumped today as the firm mapped out a new direction for the business after staving off collapse with the £83.5m sale of its health clubs - which includes a site in Middlesbrough.
Wigan-based JJB, which sold the gyms to founder Dave Whelan yesterday, will relaunch its retail chain with a new range of sports equipment and clothing under the Serious About Sport banner.
Shares soared almost 30% after the firm was also granted £50m in working capital from lenders to keep it in business. The support will be dependent, though, on JJB striking a deal with landlords under a company voluntary arrangement.
It will look to reduce an estimated annual rental bill of around £15m for 140 stores closed last year, while temporarily switching to monthly payments for its 250 open outlets.
Executive chairman Sir David Jones said: “We have taken the first step in securing JJB’s long-term future after months of speculation.”
Mr Whelan, who set up the Wigan-based group in the 1970s but sold his stake in 2007, will rebrand the gyms as DW Sports Fitness.com.
Mr Whelan’s purchase of JJB’s gyms business is part of a larger retail venture offering brand name sporting goods, equipment, footwear and apparel.
Mr Whelan, who is chairman of Wigan Athletic football team, also announced plans to rename the club’s ground as the DW Stadium.
Meanwhile pool and snooker clubs firm Riley’s has been put into administration with the loss of 200 jobs at 30 branches - including a site at Hartlepool.
Riley’s has 1,400 employees in 159 sites across the UK including sites in Middlesbrough, Stockton and Darlington.
Administrators said the Milton Keynes-based firm and its subsidiaries had suffered from a downturn in trade and large debts.
Ernst & Young said 30 sites would close, including Hartlepool, following the sale of Rileys’ assets to Valiant Sports, a company which includes some of the firm’s existing directors.
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