JJB Sports' Irish shops and gyms on market
THE IRISH division of the troubled JJB Sports chain is on the block following the appointment of a provisional liquidator yesterday.
In Britain, JJB’s rival, Sports Direct, is buying 20 of its stores, the brand and website from administrators KPMG, which the company appointed after failing to find a buyer.
Yesterday, the High Court appointed Kieran Wallace of KPMG’s Dublin office as provisional liquidator to JJB Sports in Ireland following a petition from the company’s directors.
The business employs 102 people and consists of four retail stores and two gyms, based in Dundalk, Limerick, Blanchardstown and Liffey Valley.
Mr Wallace plans to sell the business as a going concern and has begun seeking a buyer.
A KPMG statement issued yesterday said that in the meantime the stores and gyms would remain open and continue to trade as usual.
The deal with Sports Direct in Britain means that over 130 JJB Sports stores there will close with the loss of 2,200 jobs, although another 550 will be saved.
In Britain, an auction process for the retailer attracted interest from more than 100 parties and led to eight first-round bids from trade and private-equity buyers, according to David McCorquodale, the KPMG corporate finance partner who led the sales process.
However, he added that most were put off by the amount of cash and further restructuring that would have been required, he said.
Sports Direct said it will pay £23.77 million for the 20 stores, most of JJB’s inventory and its Slazenger golf brand licenses, as well as its freehold property in Wigan. It will pay a further sum of up to £250,000 after a stock take.
JJB is Britain’s biggest sports retailer but has been suffering from the fall in consumer spending, part of the fallout of the recession.
The London-listed company put itself up for sale at the end of August after several attempts to restructure the business failed to turn it around.
Earlier this year, US chain Dick’s Sporting Goods contributed £20 million in new equity to the business while existing shareholders put up a further £10 million. However, within three months, Dick’s Sporting Goods confirmed that it had written off the investment, sparking a further plunge in JJB’s share price.
Former Blackburn Rovers footballer and Wigan Athletic owner Dave Whelan founded JJB when he bought a single store in Wigan in 1971. From there, an aggressive expansion drive made it the biggest player in the British market with more than 400 stores. It floated on the London market in 1994.