JJB Sports says turnaround could take up five years
Like-for-like sales increased by 5.9% and on-going retail revenue increased by 0.5% overall. However, gross margin fell to 34.4% from 38.1%, due poor stock availability and the need for highly promotional sales initiatives to attract cash strapped shoppers.
The retailer, which avoided going into administration earlier in the year thanks in part to a deal signed with its landlords, said it could take up to five years for the business to make a full recovery.
JJB said that successful investment had enabled it to transform six of its stores which were now performing above the company average with sales of 16% and gross profit of 30%. A further 150 stores are targeted for refresh or refit in the current year, with 50 targeted for 2012/13.
Mike McTighe, Chairman, said: "Since the period end, a great deal has taken place. We have delivered two further fundraisings and agreed a significant CVA with our landlords that gives the Company a real chance of recovery. However, this is the beginning of the hard work and not the end.
He continued: "The financial restructuring was completed on schedule by the end of April and since then the operational restructuring has progressed well. Underperforming stores have closed as part of our CVA, and headcount and operating costs have been significantly reduced. Whilst the sales environment remains challenging, Management's prudent controls mean that business performance in the first quarter has met the Board's expectations.
"The restructuring of JJB will not be easy or quick and will most likely take three to five years. The retail environment is challenging, will remain so for some time and we face intense competition. But the work undertaken over the past six months, together with the crucial support of all our stakeholders have given JJB a chance to survive and ultimately to prosper and I look forward to working with our management team to make this happen."
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