JJB accuses HBOS of highway robbery
As we covered in one of our earlier posts there seems to be trouble at sports retailer JJB with the auditors and the company directors disagreeing whether the group is technically in breach of a banking covenant. However, just when the situation looked like bottoming out it appears that HBOS has used the situation to review lending terms, something which will now cost JJB in the region of £450,000 a year in extra charges.
This prompted the charge of 'highway robbery' which Chris Ronnie, the JJB chief executive was heard to utter at a meeting to discuss the results. The figures show a half year loss of £9.7 million against a profit of some £8.3 million over the same period last year.
The problem is that if a well known name such as JJB can hit the skids who else could be next on the high street to feel the wrath of their bankers. So many of the large high street names have large fixed costs and relatively low asset backing (the trend of owning shops was reversed a number of years ago with many being sold and leased back on long term arrangements) that a downturn in trade can quickly turn serious. This is not the last of the problems on the high street!
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