The JJB Sports brand could continue trading online after Sports Direct bought the failed retailer’s website and 20 stores in a £23.77m deal.
The move has saved 550 jobs at the multichannel sports equipment retailer, including those in its warehouse, but an estimated 2,200 more people have lost their posts after the remaining 133 stores closed yesterday as JJB Sports went into administration.
Visitors to the JJB Sports website are today met with a routine maintenance notice on the holding page, with the promise that “we’ll be right back.” As well as the website and 20 stores, Sports Direct has also bought JJB’s freehold property in Wigan and the licence to the Slazenger Golf brand.
Richard Fleming, UK head of restructuring at KPMG, was appointed as administrator to JJB Group yesterday. “Successive attempts to restructure the business, both financially and operationally, have not been enough to prevent the company falling into administration,” he said.
“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.
“Our team of employment specialists will be supporting staff on completing redundancy forms and putting them in touch with job seeker services. We will now be reviewing what options are available for the remainder of the business, such as selling leasehold interests.”
KPMG corporate finance partner David McCorquodale said the deal with Sports Direct followed talks with a number of other potential buyers aimed at saving the business.
“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,” he said.
“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 who can get in touch by calling 0845 3022538.
Sports Direct issued a statement confirming the details of the acquisition. It added only that it would be issuing its pre-close trading update on October 24 and interim results on December 13.
