JJB goes into administration as Sports Direct buys 20 stores
Around 2,200 workers were made redundant yesterday after struggling sportswear retailer JJB Sports collapsed into administration.
Administrators KPMG closed 133 stores while the remaining 20 outlets were sold to Mike Ashley’s Sports Direct thereby saving 550 jobs. 167 employees have been retained to assist the administrators.
JJB Sports called in administrators after attempts to sell the business failed despite interest from 100 parties including the company's founder Dave Whelan.
In addition to buying the 20 stores Sports Direct has also acquired the JJB brand and website. The stores are expected to be rebranded as Sports Direct.
KPMG said that all staff made redundant as a result of the store closures had been paid in full for their arrears of wages and holiday entitlements. The administrators have also set up a 24 hour helpline for employees.
Richard Fleming, UK head of restructuring at KPMG, said: "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."
KPMG said it was now reviewing otions for the remainder of the business, such as selling leasehold interests.
David McCorquodale, KPMG corporate finance partner who led the sales process, added: "In spite of the severity of financial distress suffered by the business, we spoke with over 100 parties in the first few days of our appointment; with 8 trade and private equity players tabling first round bids. 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 interested parties. We hope to be able to sell the leasehold interests of some of the remaining stores, which may result in re-employment of some staff."
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