JD Sports Fashion, the British retailer, continues to turn in positive figures, in contrast with its major competitors and with the general economy. In the eight weeks ended on May 30, its comparable store sales grew by 1.7 percent. In its sports division the rise was 1.2 percent, while the fashion unit turned in a 4.6 percent increase.
The company has so far been pleased with its gross margin but says that maintaining a good comparable rate might be difficult for the rest of the year, partly because of the low value of the pound sterling.
The current results come on top of same-store growth of 0.3 percent for the first nine weeks of its current fiscal year, from Feb. 1 through April 4. In that period fashion performed better as well, up b y 3.6 percent compared with a 0.2 percent decrease in sales of sports products.
It is unclear whether JD is still interested in taking control of the struggling JJB Sports, whose company voluntary arrangement (CVA) has finally gone into effect. The 28-day period in which the agreement could be challenged passed with no action, so the CVA was effective as of May 29. Part of the CVA called for JJB to get new credit facilities worth a total of £50 million (€57.9m-$80.8m) from Bank of Scotland and Barclays Bank. The company drew down on these facilities on June 3 to repay a short-term loan it had with Kaupthing Singer & Friedlander, which is in administration, and to refinance existing facilities with Bank of Scotland and Barclays. Standstill arrangements in effect with those two banks since December have been terminated.
Bank of Scotland’s £25 million comes as a revolving working capital facility, expiring on Sept. 30, 2010. Barclays issued a short-term loan in the same amount, repayable in full by Aug. 31. JJB expects to repay this with the deferred consideration it will receive related to the sale of its fitness clubs in March.
As part of its deal with Bank of Scotland, JJB has issued 11,287,434 warrants to subscribe for ordinary shares in the company to a subsidiary of the bank, Uberior Trading.
