Rescue deal may close more than half of JJB’s shops

FEWER than half of JJB Sports stores are likely to survive a deal to sell the group, which is expected to be announced later this week.

It is thought the company will be split among a number of buyers but only around 70 or 80 stores will be saved with the remainder of the 180-strong portfolio closed, with hundreds of jobs likely to be axed.

The company, which is said to be losing £200,000 a day, put itself up for sale last month despite receiving recent injections of funds to help turn the business around.

Sources say a pre-pack ­administration, through which a buyer is found ahead of administration, is the most likely outcome of talks with several interested parties, which include Mike Ashley’s Sports Direct, GA Europe, Hillco, the Ireland-based Stafford Group, and a number of wealthy tycoons.

Ashley, who also owns Newcastle United football club, is thought to be the frontrunner for a deal but would almost certainly face regulatory ­scrutiny as Sports Direct is the market leader.

It is believed that the Office of Fair Trading (OFT) would launch an investigation into any attempt by Sports Direct to buy its nearest rival. The OFT has previously looked into Sports Direct’s interests in JJB, including the acquisition of 31 stores between 2007 and 2008. Sports Direct sold a stake in JJB three years ago.

JJB has already warned shareholders, including the Bill and Melinda Gates Foundation, that they are likely to see their holdings rendered worthless under any rescue deal. Despite this, two big shareholders – Harris Associates and Invesco – managed to sell their entire holdings, representing 68 per cent of the company, shortly after the warning. It is thought day traders may have bought the shares, worth a total of around £1 million, in the hope of making a small profit.

Ashley is believed to be concerned that US-based Dick’s Sporting Goods will pick up stores and create a new and well-funded rival. Dick’s will see its recent £20m investment into JJB wiped out.

Stafford Group – which is privately owned and turns over £400 million a year in sports retail, shipping and energy – trades under the Lifestyle brand but, after tying up 45 per cent of the Irish market, is thought to be keen to expand by buying UK assets.

Other companies thought to have requested information include private investment firm OpCapita and French sporting goods retailer ­Decathlon.

Private equity firm Better Capital, founded by venture capitalist Jon Moulton, was tipped as an early front-runner to buy the chain but it did not submit a bid by the 7 September deadline.

Wigan Athletic owner David Whelan, who started JJB with a single store in 1971 before standing down from the board in 2007, has also asked for information on the sale. JJB paid Sir Tom Hunter £290m in 1998 to acquire his Sports Division chain.