JJB Sports will not have to pay the full £20 million bridging loan with Icelandic bank Kaupthing on the due date December 14, after it struck a deal with its banks.
JJB sports said that it had agreed with its lenders Barclays, HBOS and Kaupthing, to repay the £20 million pro rata across the three banks today.
JJB Sports said in a statement: "The banks are continuing constructive discussions with the company and are reviewing the company's plans and forecasts with a view to agreeing a basis for providing continuing support.
JJB Sports reported that like-for-like sales at the group, excluding Original Shoe Co and Qube, were down 7.5% from July 28 to December 7. JJB stores like-for-likes were down 8.9%, while the health club business had a 6.7% drop.
The statement added: "Given the difficult trading conditions, we started our Sale early, two weeks ago, and so far are pleased with the increased sales achieved albeit at reduced gross margin. Achievement of market expectations of profit before tax and exceptional items will depend on continuing the good sales performance in he traditional January sales period."
Non-executive chairman Roger Lane-Smith said: "During the period we have made good progress on a number of fronts in the face of the difficult trading conditions that have afflicted the entire high street. The economic outlook is challenging but I am confident that the work we are doing will put JJB in the best possible shape to trade through it."
JJB Sports said it was still in talks over the potential sale of its Fitness Club business and "non-core assets and businesses". It said that the preliminary approach for the lifestyle division, which includes Original Shoe Co and Qube did not result in a transaction. The board said the division continued to trade at a loss and that it was considering options about its future.
Earlier this month, the company assigned leases for four retail stores to Sports Direct for £3.4 million.
The sportswear chain reported losses of nearly £10 million for the first six months of the year and it has been accused of breaching some of its banking covenants, although it has denied this.