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Saturday, September 1, 2012

Struggling JJB Sports Puts Itself Up For Sale

Per www.globalinsolvency.com:

Fri., August 31, 2012
 
Debt-mired JJB Sports put itself up for sale on Thursday and warned investors their shares may be worthless, placing the sports goods retailer at risk of becoming another big-name British retail casualty, Reuters reported. The company has been rocked by funding issues, falling sales and stiff competition as UK store chains battle weak consumer spending, muted wage growth and government austerity measures. A string of household retail names including Woolworths and MFI have gone out of business in recent years, undermined by price-cutting from supermarkets and the Internet. Directors at JJB, a familiar sight on Britain's high streets with around 4,000 staff and 180 stores, said they did not believe the company would be able to raise new funds to stage a turnaround. Analysts said the sale process was not a surprise given the funding shortfall issues flagged by the company in July and its failed attempts to raise fresh cash from strategic partners. JJB said that a formal sale process would start but warned that there could be no certainty that an offer could be forthcoming. "Given the level of current debt within the company, there can be no assurance that any proposal or offer that may be made would attribute value to the ordinary shares of the company," the company said in a statement on Thursday. Shares in the company crashed 71 percent to 0.68 pence at 0840 GMT, giving it a market value of around 3 million pounds. It was worth 500 million pounds in August 2010.

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