JJB Shares Collapse As It Loses Funding Fight

Struggling retailer JJB Sports has a market value of less than £2m after it put itself up for sale.

Around 4,000 jobs across 180 stores hang in the balance after the Wigan-based company's directors admitted it would not be able to raise enough funds to stage a turnaround.

Shares in the retailer, which has debts of around £36.35m, closed down 85%, meaning they were worth less than half of 1p each.

Funding problems, falling sales and tough competition have rocked the company, leading to a string of profit warnings and a long-running battle for survival.

A formal sale process will now begin, the directors said, adding that sales had slipped 3.3% in the two months to August 26.

Investors - which include the Bill & Melinda Gates Foundation as the fourth largest shareholder - were warned their shares could be worthless.

"Given the level of current debt within the company, there can be no assurance that any proposal or offer that may be made would attribute value to the ordinary shares of the company," JJB said.

News of the sale process comes two weeks after a major shareholder wrote off its investment in the company.

US company Dick's Sporting Goods , which invested £20m in JJB, said the company's performance had "materially deteriorated from its expectations".

JJB chief executive Keith Jones resigned in July after sales at the retailer failed to improve.

David McCorquodale, Corporate Finance Partner at KPMG, who is leading the JJB sale process said: "While it is very early days, I anticipate significant interest in the opportunity to acquire this leading multichannel authentic sports retailer.

"There is a real place on the British High Street for a retailer of performance gear for the sports enthusiast."