JJB wins survival vote as landlords back plans

EMBATTLED retailer JJB Sports yesterday saw off the threat of collapse for the second time in two years as landlords agreed to a restructuring deal that will see them forfeit millions of pounds.

Sufficient creditors voted in favour of the firm's latest company voluntary arrangement (CVA), allowing JJB to tap 65 million of funds secured last week from shareholders, including Bill and Melinda Gates.

A 25m extension in working capital from Bank of Scotland was also dependent on yesterday's CVA, which will allow JJB to close 43 unprofitable stores by April 2012 and reserve the option of shutting 26 more in 2013.

The firm will pay rent at 55 per cent of current levels on the 89 shops earmarked for closure and rent will be paid on a monthly rather than quarterly basis. JJB will retain a core group of 147 outlets and provide landlords with a share of up to 7.5m in two years' time.

City analysts had warned prior to the meeting that the vote would be likely to go to the wire amid rumours that one major landlord, Land Securities, would come out against the CVA - a tool which is used increasingly by troubled companies, including Dundee Football Club, to avoid administration.

Had the CVA failed, JJB would have been the most high-profile retail casualty since the demise of Woolworths in 2009, threatening 6,100 jobs across the UK.

JJB chairman Mike McTighe said yesterday's vote demonstrated "solid support" for its turnaround plans. Shares closed up 3p at 29p.

But analysts continued to shed doubt over the long-term future of the retailer. Nick Bubb at Arden Partners said: "The big sports suppliers (such as Adidas and Nike] want JJB to survive, to avoid the industry being dominated by Sports Direct, but it is not clear consumers are that bothered."