JJB upbeat as its stock shortage eases

JJB SPORTS yesterday predicted that its stores would be fully stocked by April as it recovers from the supply difficulties that crippled the business last year.

The sportswear chain suffered from a lack of stock after suppliers became reluctant to deal with it during its recent financial crisis.

The company also revealed that chairman Sir David Jones was standing down on health grounds. He oversaw the company's rescue after becoming executive chairman in January last year before agreeing the sale of its fitness clubs, a restructuring agreement with landlords and creditors and a City fundraising.

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Jones, who was diagnosed with Parkinson's disease in 1982, is a veteran of the retail industry after roles with Grattan, Next and Morrisons.

He will remain as a non-executive director and will be available to hand over executive duties to Keith Jones, who was appointed chief executive in December and is due to join the firm in March.

John Clare, the company's senior independent director, will be acting chairman until a permanent appointment is made.

JJB has also added four-times Olympic gold medal-winning rower Sir Matthew Pinsent to its board as one of two new non-executive directors. The other newcomer is David Adams, who is currently chairman of Jessop and Moss Bros.

While JJB is now on a more secure footing, the impact of supplier problems on sales is still being felt after like-for-like sales fell 21 per cent in January. This was better than the drop of 37 per cent seen in August and meant sales for the year to 24 January were down 28 per cent on a same-store basis, off 51 per cent overall.

JJB said the stock position was steadily improving after the recent arrival of spring ranges and with further deliveries due in the coming months.

Matthew McEachran, a retail analyst at Singer Capital Markets, said the worst appeared to be over for the chain.

He added: "These figures confirm our original view that progress at JJB was not really possible until the first quarter of 2010, and even then the performance of new ranges is hard to predict. That said the bulk of the bad news should now be behind us and sales momentum should soon turn into positive territory."

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Numis Securities said that, while sales figures were in line with expectations, the company faced pressure on margins over Christmas. The pressure led to a 3 million revision to its forecast for annual results, with the broker now expecting losses of 63m for the year to January.