JJB Sports’ leading shareholders could force through a major restructuring of the beleaguered retailer after losing patience with management over the company’s poor performance.
Up to 80 of the store’s 180 shops could be shut down – affecting thousands of jobs – as shareholders look to take a more active role in turning around a “company in crisis” following a string of profit warnings, according to analysts.
Invesco, a US fund manager that owns 34pc of JJB’s equity, is understood to have proposed to buy the sports retailer’s outstanding debt from Lloyds Banking Group in a move to seize control. The idea was discussed at a board meeting last week and is one of many options said to be on the table to revive the struggling retailer.
Another could see Dick’s Sporting Goods – the American retailer that in April ploughed £20m into JJB in return for a 3pc stake – bring forward a further emergency investment of around £20m, originally scheduled for next year.
JJB has 4,000 staff and is controlled by five shareholders, including Harris Associates and Crystal Amber, which hold 76pc of the shares.
One investor said it was “premature” to talk about a debt buy-out. However, he said: “This demonstrates that the patience and tolerance of loyal shareholders has been exhausted. It’s a case of shareholders saying enough is enough.”
Neil Saunders, retail analyst at Conlumino, said: “Investors wouldn’t want to take control for any other reason than a radical restructuring, which could lead to closing unprofitable stores and laying off staff. You could be looking at up to 80 stores closing, there are quite a few that aren’t performing.”
He added that the company “lacked a clear strategy” over whether to sell specialist sports gear or fashionable labels, which has confused shoppers. Poor summer weather and a lack of demand for Euro 2012 kits – blamed by JJB for weak sales – were “not credible” excuses given the success of rivals such as Sports Direct, Mr Saunders said.
A JJB spokesman said the company was looking at a number of turnaround options.