JJB unveils £30m funding support

JJB Sports secured £30 million of additional funding today after striking a partnership with American retailer Dick’s Sporting Goods.

The Wigan-based chain, which came close to collapse last year, hopes it will be able to accelerate its store improvement plans in time for events such as football’s European Championships and the London Olympics.

Its recent troubles were given a further airing today as results for the year to 29 January showed it racked up losses of £101.1m after store closures and weak trading reduced sales by 21.7 per cent to £284.2m.

Today’s financing package will see Dick’s, which has more than 500 stores in the United States, invest an initial £20m alongside £10m from existing shareholders, such as the Bill & Melinda Gates Foundation.

With Dick’s also holding the right to buy a further £20m of convertible loans next year, the US firm could end up owning more than 60 per cent of JJB.

JJB’s chief executive Keith Jones said the “strategic alliance” with Dick’s would help accelerate his company’s revival plan.

He added: “We have always said that the turnaround of JJB was never going to be easy or quick, and the current retail environment has made our work even more difficult.”

JJB also said key supplier Adidas had agreed to provide security for a two-stage loan of up to £15m to fund store refits and that Bank of Scotland will extend existing loan facilities through to May 2015.

JJB said £20m of the funding would go towards converting 60 of its most important stores in 2012 and 2013 into a new format that during trials produced much-improved sales and margins.

Edward Stack, chairman and chief executive of Dick’s Sporting Goods, said JJB had the potential to become one of Europe’s leading multi-channel sporting goods retailers.

He added: “We look forward to providing the company with financial support at this crucial stage of its turnaround and to using our expertise in the US market to help guide its growth efforts.”