JJB Sports has set out a rescue plan involving strengthening its online arm to transform the business into a multi-channel operation. The new strategy announced this week will focus on closing loss-making stores, revamping stores in line with a new family-focused format, and building online sales with a bigger range, enhanced customer services and a mobile site.
Online sales at JJB Sports
currently account for 3% of total sales, and the strategy going forward is to grow that share by 20% a year, over the next few years. The company’s current capital expenditure plans include approximately £2.5m in the 2012 financial year, and approximately £2.3m in the 2013 financial year “for general capital programmes including maintenance and IT, which includes website development costs,” the revised business plan says.
“We will be improving the multichannel proposition including broadening the online range by introducing online exclusives, and expanding the ‘collect@store’ offer,” says the business plan. Investment will also go into developing a mobile version of the website and “exploiting catalogue opportunities”. The aim is to focus on providing customers with the easiest and most convenient ways to shop. The collect@store service is already popular but will be further promoted, with systems improved to streamline execution.
The 250-store chain confirmed it would seek a further £65m from shareholders to fund the restructuring. JJB has already raised an extra £31.5m from shareholders this year, and tapped investors for £100m in 2009. Last week, JD Sports abandoned takeover talks with JJB, citing a lack of information from its rival that would have enabled it to progress with a formal offer.
JJB employs 6,100 staff. It has been fighting for survival following a fall in sales during the recession. Looking ahead the business expects its online enhancements, store refit programme and the sales-generating influence of the 2012 Olympics and the 2012 UEFA European Football Championship, to vastly improve its financial performance.