JJB confirms sports club interest
Sportswear chain JJB Sports today confirmed “a number” of potential bidders had expressed interest in its chain of fitness clubs.
The struggling company saw shares jump as much as 70% on Monday after weekend reports that it could fetch up to £55m (€63m) for the chain.
A sale would help the debt-laden firm shore up its finances and leave management free to turn around the group’s struggling high street operation.
JJB said today: “The company confirms that it has received a number of non-binding indications of interest for this business and that discussions are continuing.”
The fitness clubs, which are run alongside existing stores, have continued to deliver strong sales growth amid testing conditions at the rest of the retail business.
The high street woes will leave JJB with an overall loss of between £5m (€5.7m) and £10m (€11.4m) for the year to January 25 as the group comes under pressure from tighter margins and lower sales.
The fitness club division, which operates from more than 50 sites, is said to have attracted interest from potential buyers such as JJB founder Dave Whelan, who sold his stake in JJB in 2007.
In December, the firm agreed with lenders Barclays, HBOS and Icelandic bank Kaupthing that a £20m bridging loan from Kaupthing need not be repaid in full by mid-December. JJB instead paid out £20m (€22.9m) to be shared between the three banks.
The firm said last month that it was in “constructive dialogue” with lenders over its medium-term financing.
