JJB Sports

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Sports Direct International Plc
Former type Subsidiary (Defunct)
Industry Retail
Fate Bankruptcy
Founded early 1900s
Founder(s) JJ Broughton
Defunct 1 October 2012
Headquarters Pemberton, near Wigan, Greater Manchester, United Kingdom
Key people David Williams (CEO & CFO)
Keith Jones (Chairman)
Products Clothing, Sportswear, Sports equipment
Revenue £284.2 million (2011)[1]
Operating income £(103.5) million[1]
Net income £(101.1) million[1]
Owner(s) Sports Direct International plc
Website JJB Sports Online (Now SportsDirect.com)
A JJB branch in Belfast showing the brands new logo and colours.
A large city-centre branch of JJB Sports on Albion Street in Leeds, West Yorkshire
JJB Sports store in Craigavon, Northern Ireland

JJB Sports plc was a British sports retailer.

On 24 September 2012, shares in JJB Sports were suspended and the firm called in administrators.

On 1 October 2012, it was announced that Sports Direct had purchased part of the business including 20 stores, the brand and its website for £28.3 million.[2][3]

History[edit]

The original JJB sportshop was founded in the early 1900s and expanded in 1971, when ex-footballer and supermarket chain operator Dave Whelan acquired a single sports shop in Wigan and immediately opened a second sports goods outlet in his Sutton, St Helens, supermarket. The original JJB sports store was established by John Jarvis Broughton in the early 1900s and later was purchased by John Joseph Bradburn. As these initials were all the same the business was known locally as JJB's. When Whelan bought the store from Bradburn, he kept the JJB name.

During the early 1990s, the store portfolio grew to 120 stores by 1994, at which point the company was floated on the London Stock Exchange. In 1998, JJB bought its largest domestic competitor Sports Division. The acquisition made JJB one of the largest sports retailers in the UK, focusing on sports clothing rather than sports equipment.

Duncan Sharpe, chief executive of JJB Sports, committed suicide in 2002. Mr Sharpe had been with the company for 19 years and was the son-in-law of the chairman, Dave Whelan. By 2005, JJB had expanded to over 430 stores throughout the UK and Ireland. It had also opened a new branch in Amsterdam in 2002.

On 8 June 2007, Whelan sold his residual 29% stake in the firm for £190 million to Icelandic financial group Exista and Chris Ronnie, a sports retailer who previously worked at Umbro and Sports Direct.[4]

On 19 October 2007, JJB bought a 10.1% stake in Umbro in a move to protect its stake in the market for England football shirts.[5] This stake was sold in its entirety to Nike in March 2008.

In December 2007, JJB announced that they had purchased the Original Shoe Company for £5 Million. JJB considered converting some of the smaller JJB High Street stores stores into OSC stores, keeping OSC as a separate division of the JJB group which would share JJB's buying, financing and marketing functions.

In September 2008 JJB released a less than impressive set of interim results,[6] which included a warning from the auditors raising doubts over JJB's future as a going concern. This is due to a short term loan repayment of £20 million due before the end of 2008. It was noted that if this could not be repaid from normal trading cashflow then JJB will be advised to sell some (unspecified) non-core assets to cover the shortfall. JJB's net worth was only £28 million in the beginning of October 2008.

In October 2008 the value of JJB shares fell to less than 10% of the value at the time of Dave Whelan's share sale to Chris Ronnie and Exista. This was partly in response to the interim financial report and also as a result of Coface removing credit insurance from debts owed by JJB to their suppliers.[7] Three weeks later 34% (majority share) was purchased by Sports Direct International PLC. The fee is still to be reported.

On 10 February 2009, JJB put their Qube and Original Shoe Company subsidiaries into administration after failing to find a buyer.[8] By the end of the week the Group secured a reprieve from its bankers to avoid putting the whole group into administration.[9]

On 13 October 2009, JJB admitted that former executives were being investigated by both HM Revenue & Customs and the Serious Organised Crime Agency.[10]

2011 major restructuring plan[edit]

JJB is one of many companies that has undergone major restructuring and change due to the recession[11] and now faces a £31,500,000 debt, the closure of 95 stores and a possible hostile takeover by one of its top rivals, JD Sports, as of February 2011.[12] The firm attempted to raise £65,000,000 in finances from its investors on 7 April 2011.[13]

JJB revealed in February 2011 that as many as 95 of its stores faced closure within the next two years.[14]

Administration[edit]

On 24 September 2012, it was reported by the BBC that shares in JJB Sports had been suspended and that the firm was calling in the administrators. It is expected that many of the firms 180 stores will close and most of the company's 4,000 employees will be made redundant.[15]

It was reported that the Bill & Melinda Gates Foundation is to lose millions of dollars from this outcome, following its investment in JJB Sports in 2009.[16]

It was announced on 1 October 2012, that rival retailer Sports Direct had purchased the 'JJB' brand name, website and 20 stores, saving around 550 jobs. However, the remaining 130 stores were to close, resulting in 2,200 redundancies.[17]

Brands[edit]

In an effort to distance themselves from the majority "own-branded" offering of main competitor Sports Direct, JJB's stock package mainly comprised products from the main sportswear suppliers, such as Nike, Adidas, Puma, and Reebok. However, JJB did operate its own brands, including 'Patrick' (Menswear & Football Accessories), and 'Olympus' (Womenswear & Fitness Accessories).

Marketing[edit]

JJB Sports launched their shopping site, JJB Sports Store, with a view to expanding their market. The majority shareholder of JJB Sports Plc was Dave Whelan but his 99% stake was sold off.

JJB now no longer operates the famous "Soccerdomes", nor any gyms or Fitness Clubs outside Ireland. Also, because of Dave Whelan's purchase of the Fitness Club and founding of DW (Dave Whelan) Sports in the autumn of 2009, JJB has lost its association with Wigan Athletic FC and Wigan Warriors RLFC. The stadium previously sponsored by the company has also been renamed the DW Sports Stadium.

On 7 September 2011, JJB Sports launched a major new marketing campaign entitled "Ready?". The campaign involves prime time television advertising, national press coverage, in store promotions and online competitions. The Ready campaign was JJB Sport's first appearance on television for over 4 years and represented the company's desire to become profitable again.

Price fixing[edit]

In 2003 JJB Sports were fined £8.3 million by the Office of Fair Trading (OFT) for fixing the price of England and Manchester United shirts in 2000 and 2001.[18] Which? consumer magazine issued proceedings against JJB Sports to sue the high street retailer for damages on behalf of consumers who were affected by the price fixing.[19]

Fitness clubs[edit]

The business operated approximately 60 Health & Fitness Centres all over the UK, which became property of DW Sports after Dave Whelan's departure from JJB.

JJB also ran health and fitness centres in the Republic of Ireland, which are now operated by Sports Direct following the liquidation of the company.[20]

References[edit]

  1. ^ a b c Annual Report 2011
  2. ^ Over 2,000 Jobs to Go As JJB Stores Close, Sky News, 1 October 2012
  3. ^ "Sports Direct thrashes out deal to buy 60 JJB Sports stores". Guardian UK. 1 October 2012. Retrieved 19 December 2012. 
  4. ^ JJB founder David Whelan sells up, BBC News, 8 June 2007
  5. ^ "JJB Sports acquires 10% in Umbro". BBC News. 19 October 2007. 
  6. ^ JJB Interim Results 2008
  7. ^ JJB Sports under pressure as insurers pull plug, Daily Telegraph
  8. ^ Wray, Richard (2009-02-10). "JJB Sports puts fashion stores into administration". London: The Guardian. Retrieved 2009-02-10. 
  9. ^ JJB wins stay of execution as Stylo folds, The Independent, 14 February 2009
  10. ^ Organised crime bureau probes ex-JJB directors, The Times, 14 October 2009
  11. ^ JJB Finance boss set to quit the sports company Wigan Today, 7 September 2010
  12. ^ Wood, Zoe (11 February 2011). "Struggling JJB to close 95 stores and asks for emergency £31.5m funding". The Guardian (London). 
  13. ^ JJB Sports aiming to raise £65m Herald Scotland, 7 April 2011
  14. ^ Sports says 95 stores could close in next two years BBC, 11 February 2011
  15. ^ "JJB Sports prepares for administration". BBC News (BBC). 24 September 2012. Retrieved 24 September 2012. 
  16. ^ Gates Foundation to lose millions in JJB Sports investment Business Journal, 24 September 2012
  17. ^ "Sold JJB Sports stores inundated with shoppers". BBC News. 1 October 2012. Retrieved 19 December 2012. 
  18. ^ JJB fights on despite cut in replica kit fine, The Guardian
  19. ^ Which? issues legal proceedings against JJB Sports
  20. ^ Britain’s Sports Direct to buy 60 JJB Sports stores The Independent

External links[edit]