JJB Sports secures £30m additional funding
UK retailer JJB Sports secured £30m (€36.17m) of additional funding today after striking a partnership with American retailer Dick's Sporting Goods.
The chain, which came close to collapse last year, hopes it will be able to accelerate its store improvement plans in time for events such as football's European Championships and the London Olympics.
Its recent troubles were given a further airing today as results for the year to January 29 showed it racked up losses of £101.1m (€121.9m) after store closures and weak trading reduced sales by 21.7% to £284.2m (€342.65m).
Today's financing package will see Dick's, which has more than 500 stores in the United States, invest an initial £20m (€24.1m) alongside £10m (€12.05m) from existing shareholders, such as the Bill and Melinda Gates Foundation.
With Dick's also holding the right to buy a further £20m (€24.1m) of convertible loans next year, the US firm could end up owning more than 60% of JJB.
JJB's chief executive Keith Jones said the "strategic alliance" with Dick's would help accelerate his company's revival plan.
He added: "We have always said that the turnaround of JJB was never going to be easy or quick, and the current retail environment has made our work even more difficult."
JJB also said key supplier Adidas had agreed to provide security for a two-stage loan of up to £15m (€18.08m) to fund store refits and that Bank of Scotland will extend existing loan facilities through to May 2015.
JJB said £20m (€24.1m) of the funding would go towards converting 60 of its most important stores in 2012 and 2013 into a new format that during trials produced much-improved sales and margins.
Edward Stack, chairman and chief executive of Dick's Sporting Goods, said JJB had the potential to become one of Europe's leading multi-channel sporting goods retailers.
He added: "We look forward to providing the company with financial support at this crucial stage of its turnaround and to using our expertise in the US market to help guide its growth efforts."
