JJB confirms its boss's £1.5m loan from Ashley

Jul 6 2009 by Karen Dent, The Journal

RETAILER JJB Sports has confirmed its boss Sir David Jones borrowed £1.5m from Newcastle United owner Mike Ashley – who is also the billionaire chief of rival Sports Direct – in a move raising potential conflict of interest concerns.

Mr Ashley lent Sir David Jones the cash in October 2007 to fund a private business venture, according to JJB.

JJB said the loan – which is still outstanding – was made to raise funds for a software firm owned by Sir David, called Advance Network Technologies. The report emerged as rumours were also swirling over an imminent investor cash call by JJB to raise at least £50m.

The group confirmed in a statement it was looking at the move as one of a range of options.

News of the loan to Sir David risks attracting further controversy for the troubled firm, given the strong commercial relationship between both sports chains.

Mr Ashley is also believed to indirectly hold shares in JJB.

A JJB spokesman insisted the loan was “made on commercial terms” while Sir David was a non-executive director, adding it was a “personal matter between them”.

Wigan-based JJB only recently agreed a rescue deal with landlords to stave off administration, but it has seen like-for-like sales continue to fall and suppliers become reluctant to deal with the firm following its high profile troubles.

Sports Direct and JJB are the two largest specialist retailers of sports-related clothing, footwear and equipment in the UK.

Sports Direct has more than 350 outlets, while JJB has reduced its portfolio to 253 stores after an extensive disposal and closure programme.

Sir David, who was knighted in the New Year’s honours list and is credited with turning around fashion chain Next, was promoted to executive chairman of JJB from deputy chairman in January.