Sports giant JJB Sports is set to close 72 of its stores nationwide following a record slump in profits. The closures, beginning in April, will include seven 're-badgings', in which the stores will become Original Shoe Company outlets. Operating profit saw decline of just over 70 per cent, as did profit before taxation, recording a slump of 71.9 per cent. Basic earnings per share are down year-on-year by 63.2 per cent.
The chain is now set to launch a massive restructuring programme, which is predicted to cost £25 million and will involve strengthening the remaining stores once closures have taken place.
When BikeBiz made contact with company press contacts we were met with several "no comments" when asking how the results may effect JJB's ability to stock low price bicycles. We were then informed that all key contacts were in meetings in the city.
Roger Lane-Smith, Chairman, said: “We are taking significant action to improve the performance of JJB’s retail stores. Whilst we have identified a number of stores for closure, which will itself strengthen our remaining store portfolio, we are also investing to improve the quality of our stores and product with further store refits, the introduction of new products from our own brands and the implementation of staff training and incentivisation programmes.
"We also plan to continue to open more combined fitness clubs and superstores, which continue to deliver strong results.
Whilst we expect current difficult market conditions to continue to affect consumers in the short term, we believe the action we are taking represents a turning point for the Company, which will benefit performance over the medium-term.”
Profits before taxation (now at a lower corporate rate of 28 per cent, down from 32.9 per cent as in the previous financial year) for the past financial year stood at just 10.8 million, down from 38.5 million year-on-year.