Markets approve changes at JJB as shares soar 60%

Published on Monday 5 January 2009 20:20

SHARES in troubled sportswear chain JJB Sports soared yesterday as its management shake-up continued to find favour with investors.

The appointment of the recently knighted former Next boss Sir David Jones as executive chairman sent JJB's shares up as much as 60 per cent amid renewed hopes for a turnaround of the firm.

JJB is also taking on the former chief executive of Selfridges, Peter Williams, to oversee strategy in the boardroom changes announced on Friday.

Investec's Katharine Wynne upgraded her rating on the stock from "sell" to "hold".

She said: "We believe that, with the new executive directors in place, the chances of the business staying afloat and surviving a restructuring are much improved."

Jones – promoted from his previous role as deputy chairman – said in a weekend interview that he thought the company was "salvageable".

The firm made rental payments on most of its stores on Christmas Day, and has negotiated monthly payments with a small number of landlords, Jones added.

Although plans to sell its Original Shoe Company and Qube chains have failed, JJB is said to have had interest from a number of parties over its chain of more than 50 health clubs.

JJB reported last month that like-for-like retail sales slumped 8.9 per cent between 28 July and 7 December. It also warned market expectations of its profits would depend on a "good sales performance" in the January sales.

But the firm agreed with its debt providers Barclays, HBOS and Icelandic bank Kaupthing that a 20m bridging loan from Kaupthing need not be repaid in full by 14 December. JJB instead paid out 20m to be shared between the three banks.