No end to JJB Sports financial woes
By FashionUnited
loading...
Shares
JJB has been rolling out a store modernisation programme and the six stores already modified have shown sales 11 per cent better than the company average. But it would need a significant amount of bridge financing to roll out the programme to the rest of its 247 stores.
“They really don’t have the funds to develop the business,” said David Stoddart, an analyst with FinnCap. “It’s not just a question of getting through this covenant breach.”
Much of the £100m raised last October went to pay down the company’s debt. The likely breach in covenants relates to the company’s £25m revolving facility with Bank of Scotland, now part of Lloyds Banking Group, which is due to be tested in January.
JJB said it is “actively engaged in constructive discussions” with the bank, which in September agreed to waive a prior covenant test.
JJB has faced pressure from Sports Direct, which has been able to undercut on pricing, while another rival, JD Sports, has found success with more fashion- conscious consumers.
In March, JJB appointed a new chief executive, Keith Jones, after having been without a chief executive since the prior March.
Image: JJB Logo
Source: FT