JJB Sports has this morning disclosed details of a £31.5m cash call, boardroom changes and a further sales slump.
The retailer, which is in the midst of a turnaround led by chief executive Keith Jones but has been undermined by harsh trading conditions, will raise the funds through a share placing and open offer.
Existing JJB Sports shareholders including Microsoft billionaire Bill Gates’ Foundation, Crystal Amber and Harris Associates have all agreed in principle to support the fundraising.
JJB’s lender, Bank of Scotland, has also waived covenant tests due in January for the retailer’s £25m revolving credit facility.
JJB said that between November 8 and December 19, like-for-likes plummeted 15.7% year on year. Gross margin slid from 45.3% to 35.4% as tough trading conditions and Arctic weather took a toll.
JJB’s chairman, former Dixons chief executive John Clare, will stand down with immediate effect and be replaced by Mike McTighe, a former Cable & Wireless boss.
JJB Finance director Lawrence Coppock, who had already announced his intention to leave, will be replaced by Dave Williams in January. Williams joins from discount department store chain TJ Hughes.
McTighe and Williams both have experience of business restructuring and turnaround.
Clare said: “During my year as chairman, the company has successfully begun the task of creating the foundations for future growth as the ‘serious about sport’ retailer.
“In light of recent trading conditions, we have also been looking at corporate restructuring and financing options. During this process, it has become clear to me that the company will benefit from having a chairman with restructuring experience to complement Keith Jones’ retailing skills.”