JJB in bid to attract more women to its stores

JJB Sports warned yesterday that it faces a number of critical trading periods as it plunged even deeper into the red.

The 195-strong store group said pre-tax losses widened to £66.5m in the 26 weeks to July 31 from £24m a year ago as total sales slumped by more than a fifth to £142.4m.

Speaking before the results were announced, JJB’s chief executive Keith Jones warned that the UK was in “a very tough economic climate where the customer is feeling squeezed”.

Mr Jones made the comments when he visited JJB Sports’ new store in Albion Street, Leeds.

JJB has become the first retailer to move into Land Securities’ £350m Trinity Leeds development.

Mr Jones described Trinity Leeds as “the principal high street regeneration scheme in the UK this year”.

He added: “Regular customers with JJB are incredibly loyal and very satisfied with the proposition we deliver. But it has been a predominantly male audience, and has been overly focused on football, maybe to the detriment of other sports. We see a tremendous opportunity to provide something for female customers (in a way) that certainly JJB hasn’t provided in the past.

“There’s no doubt running and fitness are key to women customers.

“I anticipate that we’re going to have a very challenging period over Christmas, and maybe into the New Year. Next year our sector will benefit from the Olympics coming to the UK and we’ve also got the Euro championships as well, which I think will provide another boost to the sector.

“With the Olympics, there will be a natural benefit from sport being so front of mind throughout the course of next year. There’s a feelgood factor which I feel will be apparent in the market generally.”

Yesterday, the group said trading conditions were worse than expected and remain “extremely challenging”, and added that the losses were worsened by a huge sale to clear old stock and the costs of closing 41 stores.

Mr Jones told investors yesterday that trading deteriorated further in September and October and if current trends continue, the year-end performance will be worse than expected.

Mr Jones said the business, which employs 4,500 staff, faces a number of critical trading periods.

Shares in the retailer fell by 20 per cent following the results, which analysts said missed even scaled-back market forecasts.

Like-for-like sales fell by 17.7 per cent, though JJB said that without the World Cup last year the decline would have been 10.7 per cent.

Football sales in general were poor and the group has appointed a new head of football, Ray Evans, who until recently was managing director at football kit specialist Kitbag.

Freddie George, an analyst at Seymour Pierce, now expects losses this year of £60m and does not now expect the company to break even until 2014 at best.

He said management is running out of time to turn the business around and must find a format that is different from its competitors to take advantage of forthcoming sporting events.

Cash at the end of the half-year was £17m, even though JJB raised £96m through two fundraisings during the period, both of which were supported by the firm’s four biggest shareholders including the Bill and Melinda Gates Foundation. It also restructured its property through a deal with its landlords, which involved hefty costs but will save £8m in rents.

‘Solid progress’ in turnaround

Keith Jones, chief executive of JJB Sports, stressed that he had made clear that turning the company around would be difficult and, though there remained much to be done, it had made solid progress.

“Despite the tough trading climate, the business is in better shape than of late,” he added.

During a trip to Leeds, he told the Yorkshire Post that the company’s 17 Yorkshire stores would soon have an “improved look and feel”.

He added: “We will be making it easier for customers to shop and introducing some really exciting products, and certainly introducing them to a female audience which, in the past, we’ve neglected.”