Hundreds of Scots jobs go as JJB folds

News Reporter

Tuesday 2 October 2012

HUNDREDS of jobs are being axed in Scotland after sports giant JJB was forced to close all but four stores across the country.

DOWNFALL: JJB had more than 400 stores in 2007 but has been hit by the recession. Picture: James Galloway

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Helen McArdle

The retailer has made around 350 staff redundant after it failed to find a buyer for 26 of its outlets north of the Border. Only four branches, in Elgin, Cumbernauld, Airdrie and at the Silverburn shopping centre in Glasgow, will continue to operate after JJB's arch-rival Sport Direct swooped to rescue them from administration.

Mike Ashley's firm bought a further 16 stores elsewhere in the UK, the brand and the JJB website for £23.8 million in a deal that will protect 550 jobs in the UK, including its warehouse.The JJB name will vanish from the high street as Sports Direct intends to convert all stores as part of the deal, in which it also acquired all of the company's stock and the Slazenger Golf brand. Across the UK as a whole, 133 stores have now closed with the loss of 2000 jobs. Wigan-based retailer JJB was hurt by the economic downturn and struggled to compete with Sports Direct. It put itself up for sale at the end of August after failing to secure the funds needed to overhaul its stores.Richard Fleming, the UK head of restructuring at KPMG, confirmed the closures yesterday. He said: "Successive attempts to restructure the business, both financially and operationally, have not been enough to prevent the company falling into administration. Unfortunately a buyer could only be found for 20 stores on a going concern basis."Mr Fleming added that staff made redundant as a result of store closures have had their arrears of wages and holiday entitlements paid in full.However, David McCorquodale, corporate finance partner at KPMG, added there was a chance some employees could be re-hired. He said: "We hope to be able to sell the leasehold interests of some of the remaining stores, which may result in re-employment of some staff."JJB's collapse serves as another blow to the high street after recent high-profile casualties including video games retailer Game Group, fashion chain Peacocks, outdoor specialist Blacks Leisure and Clinton Cards.KPMG said the net proceeds of the sale will be used to repay the company's outstanding debt to its lender and other secured creditors and it confirmed shareholders' interests would be wiped out. The group had already warned investors – who include the Bill and Melinda Gates Foundation – they were likely to see their stakes lost under any rescue deal.JJB's dramatic rise and fall began when former Blackburn Rovers footballer and Wigan Athletic owner Dave Whelan bought a single store in Wigan in 1971. By 1998, JJB was the largest sports retailer in the UK and in 2007 it had more than 400 stores as well as 40 sports clubs and a handful of indoor football centres, before Mr Whelan sold his family's holding for £190m in 2007. Since then JJB has struggled as the recession battered its sales. It secured a lifeline four months ago when it landed £20m from US retailer Dick's Sporting Goods and a further £10m from existing shareholders, but the dire summer finally forced the group to put itself up for sale.

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Hundreds of Scots jobs go as JJB folds

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