At least the retailer can now boast some added firepower. JJB reckons the deal with the US chain – along with a separate agreement with investors worth £10m and another with key supplier Adidas to provide securities on loans worth a potential £15m – will help it to accelerate its turnaround plan. A strategy which has so far consisted of closing some stores and revamping others to focus on sporting families and keen amateurs.
The Pittsburgh-based Dick’s is the largest publicly traded US sporting goods retailer, running over 550 stores across the pond. It wants to become a controlling shareholder in JJB, to help its plans for international expansion. Dick's said it would purchase £18.75m in junior secured convertible notes and £1.25m in ordinary shares in JJB, subject to approval of the Wigan company's shareholders. Dick's has also received an option to buy an additional £20m in junior secured convertible notes in 2013. Upon full conversion of the notes, Dick's would become a controlling shareholder.
It’s certainly a ballsy move. Britain's retail sector is hardly the smoothest of playing surfaces at the moment, with scores of household names going down the chute in recent years thanks to cut-price competition from supermarkets and the internet, rising prices, static wage growth, rising unemployment and government austerity.
That said, if JJB sort out its stores there’s a golden chance to benefit from this summer’s European football championships and the fact that the Olympics are being staged right on its doorstep. There’s nothing like a couple of major sporting events to get sporting families and keen amateurs back out on the court and the footie pitch. For five minutes, at least…