JJB Sports reports that in the 16 weeks from Feb. 1 to May 23, its sales grew by 7.5 percent on a comparable basis over the same period last year. From month to month this figure has improved, starting at a 2 percent drop in February because of poor weather conditions and building up to a rise of 19 percent for May. Revenues for the group, however, fell by 15 percent; this was attributed to the insolvency of Original Shoe Company and Qube, which went into judicial administration in February, as well as the disposal of the company’s Leisure Division, which in 2009.

At 43.6 percent, the gross margin for the 16 weeks was 6.8 percentage points over the same period a year ago. Inventories have increased to £105 million (€127.2m-$153.6m) as World Cup merchandise and seasonal stock have come in, making them £46 million higher than at this time last year. Net cash as of May 23 was £5.6 million (€6.8m-$8.2m), and JJB had full access to its banking facility.

The company also released its results for the full fiscal year ended last Jan. 31, a rough year in which the company barely faced insolvency. Total revenues plunged by 42.5 percent to £372.5 million (€451.3m-$545.0m), and the gross margin dropped by 7.7 percentage points to 38.1 percent.

The operating loss was £67.3 million (€81.5m-$98.5m), compared with a loss of £159.6 million the prior year, but the adjusted figures were less positive, with an operating loss of £67.7 million (€82.0m-$99.0m) against a loss of £20.1 million in 2009. The adjusted loss before taxation was £68.5 million (€83.0m-$100.2m), versus a negative £21.8 million last year.

 

 

Revenues from ongoing retail operations dropped by 22.6 percent to £361.1 million (€437.5m-$528.3m), and their gross margin fell by 8.9 percentage points to 38.4 percent. For only businesses that were operating during the entire 53 weeks in both years, there was a drop in sales of 27.3 percent, which the company attributed to lower stock levels as suppliers got wind of the financial troubles.

JJB recorded an operating loss from ongoing operations of £65.2 million (€79.0m-$95.4m), but this was an improvement over the previous year’s operating loss of £111.9 million. However, adjusted for exceptional items, their operating loss was £65.2 million, against an £8.5 million profit in 2009.

The fitness clubs, which were sold in March 2009, brought in revenues totaling £11.2 million (€13.6m-$16.4m) before their disposal, compared with a full-year figure of £70.5 million in the year prior. However, they were written off as a discontinued business. After the loss of the shops attached to these fitness clubs, and the administration of Original Shoe and Qube, at the end of the year, JJB was left with 250 retail stores open.

The board did not recommend a dividend payment for the fiscal year, a repeat of the decision made in 2009. JJB Sports’s board has confirmed John Clare to be its new chairman. He has been acting in that position since Jan. 31, following the departure of Sir David Jones for health reasons, and has been on the company’s board since July 2009.

Planning for 2010, JJB said it had started a review of all of its stores with a plan to refurbish some test shops this summer ahead of a program of renovations and new store openings that should debut near the end of the year. It also plans to have its website linked to its retail stock system in the third quarter, so customers can order from the full product offering even if they don’t live near a store. While the company warns that the recovery will not be quick or easy, it is looking ahead with cautious optimism. It also notes that when the national football team makes the big competitions it gets a boost from jersey sales, and this year, England is playing in the World Cup. However, the company plans to expand to cover all major sports so it will be less dependent on World Cup and Euro Cup sales.