JJB Sports has confirmed the sale of its fitness club business to Dave Whelan for £83.4 million and outlined proposals for a Company Voluntary Arrangement (CVA) for 140 of its stores.
JJB Sports said it will pay its March quarterly rent bill in full and then propose a Company Voluntary Arrangement (CVA) to include 140 closed stores, and will seek to pay rents on a monthly, rather than quarterly basis, on 250 more shops.
“We have taken the first step in securing JJB’s long term future after months of speculation.”
Sir David Jones, chief executive, JJB Sports
JJB Sports the £83.4 million generated from the sale of its fitness clubs would be used to pay off debts with its lenders and fund the company’s short term working capital requirements.
JJB Sports’ standstill arrangement with its lenders Barclays, Lloyds and Kaupthing Singer & Friedlander has been extended until approval of the CVA.
The group has also negotiated extra funding, £25 million each from Barclays and Lloyds, pending approval of the CVA.
JJB Sports confirmed the dismissal of chief executive Chris Ronnie and said finance director David Madeley intended to resign. JJB Sports has appointed Richard Manning as legal director and company secretary.
JJB Sports said it would reposition the business under a “Serious About Sport” strategy.
JJB Sports’ executive chairman Sir David Jones said: “We have taken the first step in securing JJB’s long term future after months of speculation.”
“In addition to the continued support of our lending banks, our proposals require the approval of our unsecured creditors and shareholders. Their support of our CVA proposal will ultimately allow us to focus on realising the full potential of the company’s core sports retail business.”
JJB Sports’ group like-for-like sales were down 18.5% for the 10 weeks to March 23, compared to the same period last year. The company said that the decrease in retail sales was a direct result of severe disruption to the supply of product as a result of the financial uncertainty at the company over the last six months.