JJB Sports has struck a partnership that it says will allow it to deliver on its vision of becoming a “true authentic multichannel sports retailer.”
Investors are to put £30m into the lossmaking company. Of that £20m will come from US retailer Dick’s Sporting Goods and a further £10m from four other investors. Dick's also has the option to invest a further £20m.
JJB says the money will support the company as it continues a turnaround plan that aims to transform it into a multichannel retailer. Central to that is a multichannel programme to improve its online capabilities, connecting ecommerce to the in-store experience. Already, it says, multichannel sales rose by 77% in the second half of its latest financial year, up from 15% in the first half.
The turnaround plan also includes closing more than 40 stores, cutting costs, training staff and implementing a continuous improvement plan. Over the next 18 months up to 60 stores will be given a new format.
The news came as JJB Sports published its results for the year to January 29. Total sales fell by 21.7% to £284.2m, down from £362.9m at the same time last year following store closures. Like-for-like sales were down by 13.1%. Pre-tax losses narrowed by 44.3% to £101.1m from £181.4m last time.
Keith Jones, chief executive of JJB Sports said: "The 52 week period to 29 January 2012 has once again proven to be an extremely challenging time for the Company. However, we believe that the investment package and strategic alliance with Dick's will provide a real opportunity to accelerate JJB's turnaround."
Edward W. Stack, chairman and chief executive of Dick's Sporting Goods, said: "We believe that JJB is a strong company with the potential to become a leading multichannel sporting goods retailer both in Britain and throughout Europe. We look forward to providing the company with financial support at this crucial stage of its turnaround and to using our expertise in the US market to help guide its growth efforts."