JJB Sports shares fell 29 percent on Monday morning. “The bad weather gets a mention, obviously, but JJB also points to unexpectedly poor sales of Euro 2012 shirts etc, which implies that the likes of Sports Direct and JD Sports may have had a difficult time too in recent weeks,” independent retail analyst Nick Bubb said in a note. But along with rival Sports Direct, which is controlled by billionaire Mike Ashley, JJB was cleared of allegations of price-fixing by the Serious Fraud Office.(Reuters) - JJB Sports Plc JJB.L said revenue fell sharply for the first half on lower-than-expected sales of Euro 2012 merchandise and bad weather, sparking fears that other sportswear retailers may also have suffered.īritish sports goods retailers such as JJB Sports, Sports Direct International Plc SPD.L and JD Sports Fashion Plc JD.L hoped to benefit from back-to-back sports events like the Euro 2012 football championship, the Wimbledon tennis tournament and the London Olympics. JJB was fined £445,000 by the Financial Services Authority last month for the way it communicated with the market before its results in 2008. Losses in the six months to the beginning of August narrowed to £25m from £42m as the tournament helped lift group sales by 10% to £184m. Its Slough shop re-opened in May.Ĭhief executive Keith Jones is counting on promotions to turn around the 249-store chain, but sales slowed again after a brief period of improvement during the World Cup. "JJB is more likely than before to have to resort to additional cash generating plans, eg headquarters sale and leaseback, and possibly another fundraising." JJB has refurbished its stores in Wakefield, Northampton, Leicester Fosse Park, Enfield and Bath. "The focus in the short term has to be on cash generation, in order to avoid a covenant breach and to create reinvestment opportunities back into the estate," he said. Matthew McEachran at Singer Capital Markets revised his forecast for this year to a loss of £40m from £31m. It is clear that a rights issue is needed." Philip Dorgan of Altium Securities concurred, saying: "We fear that it is going to get worse before it gets better, with the key Christmas weeks ahead of us and a damaged brand competing in a tough market, with many cost challenges in the new year. "We therefore see it as more likely that JJB will need to return to the market for cash." She added: "In our view, JJB's failure to attract customers into stores is ominous heading into another likely consumer downturn." "Despite stepping up promotional activity since the interims, like-for-like growth is below management's expectations and the damage to gross margins is heavy," said Katharine Wynne at Investec. Now analysts fear that the company will need to go cap in hand to investors again. JJB came close to bankruptcy last year but was saved by an emergency restructuring under former executive chairman David Jones that saw its fitness club division auctioned for £83m, the closure of 140 stores and a £94m capital raising.
"However, the full-year outcome remains heavily dependent on our performance during the important pre-Christmas and new year sale periods."
J J B SPORTS SALE FULL
"The board believes that current trading conditions are having and will continue to have a negative impact on its expectations for the full year," said JJB. Investors took fright at the news, sending the shares down nearly 17%, or 1.6p, to 8p at the close. Like-for-like sales rose 13.1% in the six weeks to 7 November, but this was lower than JJB anticipated and largely driven by promotions, which reduced the company's gross profit margin to 33.8% from 42.2% in the first half.
0 kommentar(er)
