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| JJB shares slump after investor writes off stake | JJB shares slump after investor writes off stake |
| (about 21 hours later) | |
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| Shares in JJB Sports have plummeted 24% after its US shareholder wrote off its investment in the struggling retailer. | Shares in JJB Sports have plummeted 24% after its US shareholder wrote off its investment in the struggling retailer. |
| Dick's Sporting Goods, which took a 3% stake in JJB in exchange for a £20m investment in April, took an impairment charge worth roughly the same amount. | Dick's Sporting Goods, which took a 3% stake in JJB in exchange for a £20m investment in April, took an impairment charge worth roughly the same amount. |
| That means its entire investment in the British firm was in effect wiped off. | That means its entire investment in the British firm was in effect wiped off. |
| JJB's share price fell to £3.30 in London trade on the news, which was announced as part of the US group's second-quarter results. | JJB's share price fell to £3.30 in London trade on the news, which was announced as part of the US group's second-quarter results. |
| "Since making our investment in JJB, JJB's performance has materially deteriorated from its expectations, partly due to a worsening macro environment in Europe, adverse weather conditions in the first quarter and lacklustre sales associated with the recent Euro championships," said Dick's Sporting Goods chief executive Edward Stack. | "Since making our investment in JJB, JJB's performance has materially deteriorated from its expectations, partly due to a worsening macro environment in Europe, adverse weather conditions in the first quarter and lacklustre sales associated with the recent Euro championships," said Dick's Sporting Goods chief executive Edward Stack. |
| Cost-cutting | Cost-cutting |
| "As we indicated at the outset, this is a high-risk investment that was structured to provide us with meaningful upside and capped downside," Mr Stack added. | "As we indicated at the outset, this is a high-risk investment that was structured to provide us with meaningful upside and capped downside," Mr Stack added. |
| "We have no further funding obligations to JJB at this time and will continue to monitor the situation." | "We have no further funding obligations to JJB at this time and will continue to monitor the situation." |
| JJB is in the middle of a cost-cutting programme designed to stem losses that totalled £100m last year, and has warned that sales in recent weeks have been poor. | JJB is in the middle of a cost-cutting programme designed to stem losses that totalled £100m last year, and has warned that sales in recent weeks have been poor. |
| Hurt by the economic downturn, it has also struggled to compete with rival Sports Direct. | Hurt by the economic downturn, it has also struggled to compete with rival Sports Direct. |
| In July Bob Corliss, a US turnaround specialist, joined JJB as its chairman to work on ways to improve its performance. | In July Bob Corliss, a US turnaround specialist, joined JJB as its chairman to work on ways to improve its performance. |
| However, chief executive Keith Jones stepped down soon afterwards. Beverley Williams, the former boss of the La Senza lingerie chain, replaced Mr Jones on an interim basis. | However, chief executive Keith Jones stepped down soon afterwards. Beverley Williams, the former boss of the La Senza lingerie chain, replaced Mr Jones on an interim basis. |