Kooga, the British rugby apparel brand, has started to lay off staff and to cut back on marketing expenses due to acute market pressure in the United Kingdom. JJB, the British retailer that acquired 48 percent of Kooga two years ago, has apparently opened talks to sell off this stake, along with other less strategic assets.

JJB bought the shares at about £1.3 million (€1.5m-$2.1m) from Kooga’s two owners and leading executives, Shak Anwar and Bill Newton, who established the brand in Rochdale in 1997. Kooga is endorsed by such high-profile Rugby League teams as Bradford Bulls and Harlequins, and Rugby Union clubs wearing Kooga include Saracens. The brand reportedly had an annual turnover of about £10 million (€11.8m-$16.4m) in 2007.

Separately, the annual report of JJB for the financial year ended on Jan. 25, 2009, revealed that the retailer had shifted some purchases of rugby apparel from Kooga to Cotton Traders, another British company based in Altrincham. The chairman and director of this apparel company is David Jones, who is also JJB’s chairman. The retailer spent £858,000 (€1.0m-$1.4m) with Cotton Traders in the last fiscal year, compared with nothing the previous year. Meanwhile, spending with Kooga dropped from almost £1.7 million in the fiscal year ended on Jan. 27, 2008, to just £500,000 (€591,200-$818,200) in the latest fiscal year.

Furthermore, the document showed that JJB had made payments of £2.1 million (€2.5m-$3.4m) to Source Lab, a company whose directors include Andrew Ronnie. He is the brother of Chris Ronnie, JJB’s former shareholder and chief executive, who was suspended and then dismissed in March, although his lawyers insisted he had resigned. The annual report also reveals that Ronnie received a total salary package of more than £560,000 (€662,100-$916,400) from JJB in the year to Jan. 25. As reported by Crain’s Manchester Business, Ronnie claimed he had received a £274,000 (€324,000-$448,400) pay-off, to which he was entitled, but JJB said the money was paid without its authorization and has asked for it to be returned.

JJB paid another £106,000 (€125,300-$173,500) for marketing services to Retail Gateway, a company owned by David Jones’ son, Stewart. However, the retailer said that the assignment had been issued before David Jones became JJB chairman, and Stewart had since become a full-time employee, in charge of web development.