JJB situation set to be resolved this week
While the situation regarding the future of JJB Sports has been shrouded in uncertainty for some time, the liquidators of the Icelandic bank Kaupthing will this week hold an auction of 65 million shares in JJB sports. The shares originally belonged to former chief executive Chris Ronnie, who is involved in a rather heated situation regarding his departure from the company, which is allegedly linked to the sale of his shareholding to the Icelandic operation.
The short term history of JJB sports has been volatile to say the least with mounting debts, falling sales, key executives leaving the company and the recent sale of the fitness division to founder David Whelan. When you also throw in the name of Mike Ashley, the owner of rival chain Sports Direct, we have the makings of a Hollywood epic!
There's no doubt that the collapse of the Icelandic financial sector did impact upon the short term funding situation for JJB Sports although there are signs of assistance from the banks and the sale of the fitness operation has also taken off some short-term pressure. But like many operations in the UK retail sector, JJB Sports really needs to see a recovery in consumer spending to secure the long-term future of the group.
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