JJB issues profit warning as losses widen

JJB Sports, the struggling British retailer rescued by a deal with landlords in March, posted wider first-half losses and warned the full-year outcome was likely to fall short of internal expectations.

"As with most retailers, our year-end outturn is dependent on Christmas trading, nevertheless if current trading conditions continue our year-end outturn is likely to be worse than our base-budget indicates," the firm said Monday.

Wigan, northwest England-based JJB, which counts America's richest man Bill Gates among its major shareholders, said it made a loss of £66.5m in the 26 weeks to July 31.

That compares with a loss of £24m in the same period last year.

JJB, which competes with larger rival Sports Direct as well as grocers and online retailers, said its revenue fell 22.6 per cent to £142.4m, with sales from stores open over a year slumping 17.7 per cent.

The firm said the results were impacted by the closing of unprofitable stores and the sell-out of old and obsolete stock.

JJB's rescue deal with landlords in March was the second in two years, and allowed it to close poorly performing stores and cut rent payments on others. Without the deal, it would have fallen into administration.

In May the firm posted a loss of £181m for the 2010-11 year.

JJB ended the first half with net funds of £17m.

During the period JJB closed 49 stores and revamped 86. The new stores are targeted at keen amateurs, recreational sports participants and sporting families.

"I remain confident of JJB's return to profitability and growth," said Chief Executive Keith Jones.