DIRECTORS of JJB Sports announced plans to appoint administrators to the embattled retail chain in a move that will lead to renewed uncertainty about the fate of 30 stores and the jobs of hundreds of employees in Scotland.
The directors appear to have thrown in the towel on attempts to sell the whole company and plan to appoint administrators as part of a process that is expected to involve a bidder cherry-picking parts of the business.
As many as half of its 180 stores are expected to close in a so-called pre-pack sale process once administrators from KPMG are appointed, threatening a large number of the 4000 jobs at the firm.
Following the suspension of trading in JJB Sports shares on the AIM market yesterday, the sale is expected to result in the value of the shareholdings amassed by investors, which include Microsoft founder Bill Gates, being wiped out.
The rival Sports Direct business, controlled by Mike Ashley, is seen a front-runner to acquire some of the company's operations, subject to competition considerations.
Sports Direct recently agreed a joint venture deal to distribute merchandise for Rangers Football Club.
This superseded a deal that Rangers had held with JJB since 2006.
The decision to appoint administrators follows a long battle to improve the fortunes of a company whose shares were valued at £10 each just five years ago.
Founded by former Blackburn Rovers footballer and Wigan Athletic owner Dave Whelan in 1971, JJB flourished amid the boom in consumer spending in the 1990s.
The company became the biggest sports retailer in the UK in 1998 when it bought Sport Division from Sir Tom Hunter for around £290m.
However, the group was hit hard by the squeeze on consumer spending triggered by the financial crisis, amid fierce competition from rivals.
JJB told investors: "The Board notes that it does not have and does not now expect to receive an offer for the shares of JJB."
The group will trade through all retail outlets pending completion of a sale process.
JJB said it hopes to be in a position to announce a sale of the trade, assets and brands of the group within the next few days.
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