STRUGGLING sportswear retailer JJB yesterday warned that full-year results would not meet its hopes after poor recent trading, increasing the chances of the company having to raise additional cash.
Shares in JJB, which came close to administration last year, lost up to 29 per cent of their value after the retailer said sales over the last six weeks had failed to match its expectations, blaming the weakening trading environment.
The company has slashed the price of some goods in an attempt to fuel sales but the drive has failed to pay off.
It said sales at stores open more than a year increased 13.1 per cent in the six weeks to 7 November -- lower than JJB had anticipated and heavily influenced by promotional initiatives, which also reduced its gross margin to 33.8 per cent from 42.2 per cent in the first half.
“The board believes that current trading conditions are having, and will continue to have, a negative impact on its expectations for the full-year”, said JJB.
“The full-year outcome remains heavily dependent on our performance during the important pre-Christmas and New Year sale periods.”
Katharine Wynne, an analyst at Investec Securities, said that it was “ominous” that JJB’s efforts to kickstart sales had failed given the tough consumer environment.
JJB is forecast to make full-year losses of around £40m, according to City analysts. The retailer has 249 stores in the UK and Ireland. Singer Capital Markets analyst Matthew McEachran said: “The focus in the short term has to be on cash generation.”