JJB Sports is facing a backlash from retailers over its plans to undergo a second company voluntary arrangement (CVA).
One of the UK’s biggest retailers has called for an emergency industry meeting to fight back against the sportswear retailer’s plans to close up to 95 stores, according to The Sunday Telegraph. It is threatening to take action against landlords if the CVA is approved.
The retailer told the newspaper: “This cannot be allowed. Every retailer would love to be able to dump their worst performing stores.
“We will call a meeting of all the major retailers to fight back against JJB’s plan. We will tell landlords that if they accept this, we will consider whether or not to pay our rents.”
JJB, which currently has 250 stores, wants to close 45 significantly underperforming stores next year and is putting a further 50 outlets under review for closure within two years. This is the struggling retailer’s second CVA in two years; it shut 140 stores in 2009.
In order for the CVA to go through, the retailer must receive the backing of 75% of its unsecured creditors and 50% of its shareholders. Some of its landlords have said they would not support the action.
The ailing retailer is using a CVA to secure its future. JJB Sports warned it is in danger of running out of cash by April as its like-for-likes plunged 11.5% in the 5 weeks to January 23. It has already raised £31.5m of capital from shareholders this year to keep the business afloat.