Struggling sportswear retailer JJB Sports is having to slow down its refurbishment programme as poor sales mean the group will need an injection of cash from its backers earlier than planned.
The group said it is in discussions with its strategic partners to accelerate the timing of additional funding required to implement its turnaround plan.
JJB had a particularly bad couple of months in May and June, with the wet weather and England's pedestrian performance in the Euro 2012 football championship putting a dampener on sales.
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Group like for like sales for the 24 weeks ended July 15th decreased by 8.7% and cash margin decreased by 16.6%. As at July 18th, net bank debt was £17.7m, while the group has also drawn down £1.1m under the trade loan facility, details of which were announced on April 4th.
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The group said that performance at the five stores which have been given a facelift has been encouraging, with those stores seeing an uplift in sales and cash margin compared to the rest of the estate of 22.0 percentage points and 23.4 percentage points respectively, since being refitted. In view of that, the board would like to accelerate the refurbishment programme but cash constraints currently make that impossible.
"In light of the deterioration in trading, the directors have sought to implement a combination of management initiatives, which were identified in the 2012 results, and have been successful in mitigating the trading and cash shortfall to a certain extent. However these actions have not fully mitigated the shortfall," the company statement said.
"As a consequence, and in light of the continuing poor macroeconomic environment, the level of future headroom on working capital facilities and financial covenants will be significantly reduced in the short and medium term," the statement continued.
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