Sports Direct has bought 20 of rival JJB Sports’ stores out of administration, saving up to 550 jobs.
The deal also includes the brand and website, but will see the remaining 133 JJB stores close, resulting in some 2,200 redundancies. A total of 167 employees have been retained to assist the administrators, who were appointed today.
KPMG’s Brian Green, David Costley-Wood and Richard Fleming were appointed joint administrators to JJB Group, with Green and Costley-Wood also acting for SSL Retail and, alongside Blair Nimmo, for Blane Leisure.
KPMG’s head of restructuring Fleming said: “Successive attempts to restructure the business, both financially and operationally, have not been enough to prevent the company falling into administration.
“Unfortunately a buyer could only be found for 20 stores on a going concern basis. All staff made redundant as a result of store closures have had their arrears of wages and holiday entitlements paid in full.”
Sports Direct is understood to have been eyeing up three times as many of JJB’s stores, but it is thought this could have triggered a competition issue.
David McCorquodale, corporate finance partner who led the sales process, said: “In spite of the severity of financial distress suffered by the business, we spoke with over 100 parties in the first few days of our appointment; with eight trade and private equity players tabling first round bids.
“Unfortunately the level of cash and further operational restructuring required to rescue a more substantial part of the business was too much risk for most interested parties.
“We hope to be able to sell the leasehold interests of some of the remaining stores, which may result in re-employment of some staff.”
The administrators have set up a 24 hour helpline for employees: 0845 3022538.