JJB Sport sees sales dive

Shares in JJB Sports have closed down 14% at 9.6p after the retailer reported smaller losses but warned

that trading conditions were getting tougher.

"There appears to be increasing caution in the market over discretionary expenditure," the company said.

The retailer reported a loss for the six months to the end of July of £24m compared with a £42.9m loss a year ago. This was in largely due to a rise in like-for-like sales - which strip out the impact of new stores - of 14.4%.

Despite investors' negative reaction to the company's half-year figures, chief executive Keith Jones said JJB was making good progress on its three-year turnaround plan.

The firm had struggled when sales fell during the recession, and last year it was forced to place two of its subsidiaries - Original Shoe Company and Qube - into administration, and sell its gym business in order to raise cash.

Despite the sales, losses tripled to £68.5m in the year to the end of January 2010. The retailer admitted that it came close to going into administration last year, but a successful £100m rights issue in October allowed the retailer to pay off its debts