Collapse of sports chain JJB costs 350 Scottish jobs

Rival Sports Direct has agreed to pay £23.8 million for 20 stores, along with the JJB website and brand. But that only secured just 550 jobs in the UK, meaning 2,200 were made redundant with immediate effect.

Four stores north of the Border – in Airdrie, Cumbernauld, Elgin and Glasgow – employing a total of 60 people, have been saved but the remaining 26 outlets across Scotland closed yesterday with the loss of 367 jobs.

In total, 167 staff will be kept on UK-wide to assist administrators from KPMG.

Richard Fleming, KPMG’s UK head of restructuring, said all staff made redundant through the store closures have had their wage arrears and holiday entitlement paid in full and would be offered help in finding new jobs.

He added: “Successive attempts to restructure the business, both financially and operationally, have not been enough to prevent the company falling into administration.

“Unfortunately, a buyer could only be found for 20 stores on a going-concern basis.”

JJB’s collapse is a stark reminder of the tough conditions facing the retail sector, which has seen a number of high-profile casualties, including MFI, Woolworths and Zavvi.

The Wigan-based firm secured a financial lifeline in April when it landed £20m from US retailer Dick’s Sporting Goods and a further £10m from existing shareholders, including the Bill and Melinda Gates Foundation. But the company put itself up for sale at the end of August after failing to secure the funds needed to overhaul its stores.

KPMG said the proceeds from the sale will be used to repay JJB’s outstanding debts, but shareholders’ interests will be wiped out.

Corporate finance partner David McCorquodale, who led the sale process, said more than 100 parties had shown an interest in the business, and eight trade and private equity firms had tabled early-stage bids.

He added: “Unfortunately, the level of cash and further operational restructuring required to rescue a more substantial part of the business was too much risk for most parties. We hope to be able to sell the leasehold interests of some of the remaining stores, which may result in the re-employment of some staff.”

Wigan Athletic owner David Whelan, who started the sportswear chain with a single store in 1971 before standing down from the board in 2007, set up rival DW Sports in 2009 when he acquired 52 fitness clubs and retail stores from JJB for £83.4m.

Yesterday, it emerged that DW Sports had stopped taking internet orders “for the foreseeable future”, but a spokeswoman would not say why this decision had been taken. She said she was not aware of any plans for the company to buy any JJB stores.

Sports Direct, headed by Newcastle United owner Mike Ashley, also owns the Dunlop, Kangol and Lonsdale brands. Yesterday’s deal saw it take control of the Slazenger Golf brand licences. It confirmed that the 20 stores being bought will trade under the Sports Direct banner.

List of UK stores bought by Sports Direct and the number of staff employed:

Airdrie - 12

Antrim - 10

Brighton - 21

Chorley - 7

Cumbernauld - 11

Dorchester - 9

Dover - 12

Elgin - 12

Glasgow Silverburn - 25

Leamington Spa - 18

Leeds - 11

Lisburn - 27

Liverpool - 34

Llandudno - 17

Londonderry - 28

Oldbury - 22

Rhyl - 11

Rochdale - 16

West Bromwich - 18

Winchester - 9

How Scottish stores are affected:

Aberdeen Union Street/Berryden Retail Park - 36 jobs lost between two stores

Airdrie - bought over by Sports Direct

Ayr - 15 jobs are being lost

Clydebank - 14 jobs are being lost

Cumbernauld - bought over by Sports Direct

Dumfries - 17 jobs are being lost

Dunfermline - 14 jobs are being lost

East Kilbride - 22 jobs are being lost

Edinburgh Craigleith Retail Park/Pentland Industrial Estate - 31 jobs lost with the closure of two stores

Elgin - bought over by Sports Direct

Falkirk - Central Retail Park/Howgate Shopping Centre: 19 jobs lost with closure of two stores

Glasgow Argyle Street/Ibrox Stadium/Sauchiehall Street - 44 jobs lost with closure of three stores in Glasgow

Glasgow Silverburn - bought over by Sports Direct

Glenrothes - 9 jobs lost in Glenrothes

Greenock - 13 jobs lost in Greenock

Hamilton - -13 jobs lost in Hamilton

Irvine - 8 jobs lost in Irvine

Kilmarnock - 11 jobs lost in Kilmarnock

Kirkcaldy Central Retail Park/Mercat Centre - 34 jobs lost in Kirkcaldy with closure of two stores

Livingston - 15 jobs lost in Livingston

Perth - 15 jobs lost in Perth

Renfrew (Braehead) - 10 jobs lost in Renfrew

Stirling - 15 jobs lost in Stirling

Wishaw - 12 jobs lost in Wishaw