It’s been a pretty dismal 2009 for JJB, so it was no great surprise to see the sports retailer post a dismal set of half-year results today: it made a loss of £43m, about three times more than its £14m loss in the equivalent period last year, with like-for-like sales plummeting by a hair-raising 42.5%. Just about the best you can say for JJB is that at least it’s still standing – after almost going bust earlier this year and subsequently becoming embroiled in further controversies, that’s an achievement in itself. And chairman Sir David Jones found time today to have another pop at arch-rival Mike Ashley’s Sports Direct, so there’s clearly still plenty of fight left in there…
Jones blamed the fall in sales on stock shortages – and suggested that given the long lead times involved, the situation was unlikely to improve until the first quarter of next year. This might seem an odd excuse, since it would normally point to incompetence on behalf of the buyer. But for JJB, it was largely unavoidable – the chain was so close to going bust at one point that many suppliers (understandably) refused to deal with it. However, Jones is also trying to change the kind of stuff JJB sells, as part of a new ‘Serious about Sport’ strategy – a conscious effort to distance it from Sports Direct’s ‘pile it high, flog it cheap’ approach (which is admirable) and the fashion-led offering of JD Sports (which may well be barking, given that JD just reported an 11% hike in first-half profits).
But in some respects, JJB’s biggest achievement in the first half was basically not going bust. The chain avoided bankruptcy by the skin of its teeth via a complete restructuring, which involved putting two subsidiaries into administration, flogging the health clubs business, selling off dozens of stores, and cutting a deal with its landlords over unpaid rent. And its problems didn’t end there: first came the bizarre admission that Jones owed a seven-figure sum to rival Ashley, followed by news that JJB had blown the whistle on a price-fixing scam it had been operating with Ashley’s Sports Direct. JJB insists it won’t face financial penalties for this, having come forward voluntarily, but not everyone seems convinced.
Clearly Sports Direct is never far from Jones’s mind: as well as some dismissive references to the ‘downmarket’ brands he's trying to get rid of (like Slazenger and Lonsdale, both Ashley-owned), he also told the Standard today that what Sports Direct had done to its flagship Lillywhites store in London has been ‘a complete and utter tragedy’. Investors might argue that since JJB’s sales figures are also pretty tragic, and with no immediate prospect of the retail environment improving, he'd be better off focusing on his own problems...
In today's bulletin:
Jaguar to shut UK plant as Mandelson wades into Opel row
HIV 'vaccine' a false dawn for Big Pharma?
JJB boss has another pop at Ashley - as losses treble
Game Group needs Dan Brown-style saviour
Six million people can't get no (job) satisfaction?