JJB Sports Plc, the Wigan based sports retail giant, has endured a torrid time over the past couple of years, but could the fortunes of the company whose catch line is, ‘serious about sports’ [1] , be about to turn?
JJB have recently issued a trading update [2] , which announced that the like-for-like revenue during the 52 weeks to 24 January 2010 was down 28% on the previous year. The past 12 months was not a run of the mill retailing period for JJB, as they had a major stock shortage due to supplier problems [3] , implemented a Company Voluntary Agreement (CVA), raised around £100m in capital and sold the fitness clubs to its former owner and founder Dave Whelan [4] .
Adding to the investor pain, Sir David Jones has declared that, due to continuing issues with his health, he will be stepping down as its Chairman but will remain as a Non-executive director of the company. John Clare, a retail veteran and former DSGi chief executive, will now take over as acting chairman. JJB have also announced that 4 times Olympic Gold winner and broadcaster Sir Mathew Pinsent has been appointed as a Non-executive director of the company. [5]
Still, filing what has happened into the history section, is there still hope for the JJB brand? Or could the events of the past couple of years mean long term woe for the company?
JJB Sports operate in a highly competitive market place which contains two very big rivals, namely, Sports Direct and JD Sports. The demise of JJB in terms of performance started around 2007 when David Whelan, sold his 29% holding in the sporting goods firm for £190m to Icelandic financial group Exista and Chris Ronnie [6] , a sports retailer who has previously worked at Umbro and Sports Direct.
Under Chris Ronnie’s leadership, JJB tried to move its core product towards the aspirational end of the sports market targeting JD Sports position, leaving Sports Direct (a company Chris Ronnie had previously worked for [7] ) to clean up the value end of the market. JJB had failed to reach the top end of the market while the value customers deserted the brand,…
