The future of JJB Sports should be determined today as creditors vote on whether to approve the Company Voluntary Agreement (CVA) proposed by the retailer.
JJB Sports needs 75% of creditors, including landlords, to vote in favour of the agreement which would see JJB Sports end the leases to 140 stores and pay rents on a further 250 shops on a monthly, rather than quarterly basis.
Approval of the agreement is a condition of JJB Sports’ lenders - Kaupthing, Barclays and Lloyds - continuing to support the group. Without the ongoing support of the banks, the chain is likely to go into administration.
Landlords failed to support a CVA proposed by footwear group Stylo, which operated the Barratts chain, earlier this year. The group subsequently went into administration.
However, JJB Sports has said that the CVA proposals have had a favourable reaction from landlords so far and is optimistic that the vote will go its way.
Landlords including Hammerson, Land Securities and British Land will vote on the CVA today at a meeting in London’s Royal Horticultural. Shareholders are due to vote on the CVA on Wednesday.
The British Property Federation (BPF) praised JJB Sports’ handling of the CVA but called for stricter controls on the way insolvencies are managed.
BPF chief executive Liz Peace said: “We are concerned that some insolvency practitioners are using CVAs not just to threaten suppliers into ripping up contracts but also as cash cows to make large sums of money from other people’s misery. The BPF wants to see some safeguards on this matter which would ultimately serve to reduce costs for all concerned and hopefully ensure the survival of more businesses.”