Shares in the group – which were worth a total of as much as £1bn a decade ago – were suspended yesterday and remaining investors, including US tycoon Bill Gates, saw the value of their holdings wiped out.
KPMG, which has been overseeing the sale and is also lined up as administrator, said it is still in talks with potential buyers and expects to sell parts of JJB’s assets through a pre-pack administration over the next few days.
“The offers received include offers to acquire certain of or substantially all of the trade, assets and brands of the group. However, the board notes that it does not expect to receive an offer for the shares of JJB,” it said in a statement.
JJB’s 180 stores will continued to trade during the pre-pack process but as many as half of the stores are expected to be closed in the sale, endangering thousands of jobs.
Mike Ashley’s Sports Direct remains one of the frontrunners to buy the struggling retailer, although it is said to be interested in less than half of the stores. Irish conglomerate Stafford Group is also thought to still be in the running to buy parts of the business.
The Wigan-based retailer – founded by ex-footballer Dave Whelan in 1971 – was forced to put itself up for sale in July after battling with falling sales and failing to secure fresh funds from investors.
Richard Fleming, head of KPMG’s UK advisory team, was yesterday lined up as the administrator to Wigan-based JJB Sports, along with restructuring partners Brian Green and David Costley-Wood.
For Fleming and his team, the sportswear retailer’s impending collapse must feel like Groundhog day after having already twice attempted to steer the beleaguered company from administration. KPMG first arranged a company voluntary agreement (CVA) for JJB in 2009 and again in 2011, when landlords agreed to forfeit around £60m in rent to stave off collapse of the firm. But the group was living on borrowed time and JJB is now set to be put through a pre-pack administration, where its assets are sold ahead of the formal insolvency process.
Fleming and Green, who is based in KPMG’s Manchester office, have also been busy averting collapse at other firms and were last month involved in securing a crucial CVA at the debt-laden budget hotel chain Travelodge. The deal saw landlords agree to a rent reduction at over 100 hotels.
Fleming joined KPMG in 2003 and was made head of the UK advisory team in April. He has also acted as lead administrator to MF Global UK, Peacocks and Blacks.