When JJB Sports entered administration last year, it seemed that the already embattled high street was to receive yet another blow. However, a bid from rival chain Sports Direct meant that many of the sportswear firm’s stores would remain operational, albeit under a different brand, while 550 staff would also be retained.
Wigan-based JJB Sports entered administration in 2012, and by the end of October Sports Direct had acquired 20 of the chain’s commercial properties. As part of the deal, Sports Direct also gained JJB’s headquarters in Wigan and a warehouse used for housing excess stock.
Now, six months on from the £24 million property deal, Sports Direct has announced the closure of 70 per cent of the acquired stores.
Chief executive Mike Ashley claims this is because lease terms fell through with the landlords of the 14 properties concerned – however, industry insiders speculate that the entire deal was simply a means of removing the JJB brand from the market entirely and thus removing any future competition for Sports Direct.
The future of the remaining six stores is as yet unclear, but it is widely believed that these will also be returned to the market once negotiations with their respective landlords reach a conclusion.
At present, JJB’s warehouse is being used by Sports Direct for distribution, while the headquarters has become a base for multiple fashion brands encapsulated in the Sports Direct group, including Cruise, Van Mildert and Flannel. No announcement regarding the future ties, or lack of, with Sports Direct have been made for either of these properties.
Former JJB Sports owner Dave Whelan has described the decision to close the 14 stores as “strange”, claiming that he remembered many as being “very good stores.” This, presumably, is why he has agreed lease terms on at least three, while his executives are examining the other sites in order to determine their worth to his new DW Sports chain.
At present, DW Sports operates 75 gyms and 60 sportswear stores in the UK, yet the popularity of the business has meant rapid expansion could be a distinct possibility in the next 12 months.
Mr Whelan confirmed his interest in a number of the stores, saying; “We are looking over at least half of them.”
Perhaps this saga can go full circle, with Mr Whelan once again at the helm of these 14 stores. However, with tough competition from Sports Direct, it must be hoped that history will not repeat itself in this case.
Do you think Mike Ashley agreed to the deal in a bid to remove his chain’s main competitor – despite the fact that JJB Sports had already entered administration – or do you believe he genuinely wanted to save the stores but high rents got in the way?
