Another disappointment for JJB
Struggling UK-based sportswear retailer JJB Sports has been dealt another blow after Capital Shopping Centres, the largest mall owner, said it would vote against the firm's proposed restructuring plan.
JJB, in which the US’s richest man Bill Gates holds a 5.5% stake, has said it needs creditors, including landlords, to back its second company voluntary arrangement (CVA) in as many years or it will likely go into administration.
However, Kay Chaldecott, CSC’s executive director of property, recently told analysts at a meeting following the publication of the firm’s full year results that it intended to vote against JJB’s scheme. CSC currently has three stores leased to JJB.
JJB, which employs 6,300 people, proposed the CVA in early February 2011 but is yet to publish full documentation and set a date for creditor and shareholder meetings to vote on the plan.
The firm wants to close up to 95 stores, retain a core group of 150 and pay rent monthly rather than quarterly.
On 21 February 2011, JJB raised £31.5 million in a share sale that represented a first step towards survival.
But the firm has said it requires a larger capital raising, in addition to the £31.5 million, along with creditor and investor support for the CVA if it is to stay in business.
JJB is also in takeover talks with rival JD Sports. Analysts are, however, sceptical a deal will emerge, given that JD may prefer to wait and see if JJB survives.
