High street brand JJB was facing the possibility of going under when the KPMG
team came along.
A CVA, a delicate balancing act at the best of times, was complicated by the
scale of JJB’s operations. JJB’s closed stores’ rent roll came to £17.3 million,
with 140 dark stores bleeding money from the organisation.
When KPMG arrived, the company had cash requirement issues, unprofitable
divisions, unprofitable stores and lacked a long-term strategy. KPMG developed a
three-pronged approach to the problem.
First, it provided assistance on forecasting and generating working capital,
enabling JJB to remain within its bank facilities and providing comfort to its
Second, KPMG’s debt advisory practice assisted JJB’s management in modelling
a long-term sustainable debt position, negotiated stand still agreements with
the lender group and obtained new funding facilities.
The final prong was to dispose of the unprofitable arms of the company,
through either sale or administration.
In awarding the KPMG team the Accountancy Age Business Recovery Project of
the Year, judges noted the complexity of the task.
“JJB was a complex project and the adviser had its work cut out,” the judges
said.“ A sustainable future had to be developed for the business and KPMG
demonstrated great innovation with its CVA process. It was terrific result all
The CVA was overwhelmingly welcomed by landlords. KPMG demonstrated that
working with landlords to resolve issues is a viable and realistic possibility.
KPMG said there was complete transparency in communication between
management, advisers, stakeholders, shareholders and suppliers.
Following its work with JJB, KPMG went on to advise in the CVA for Signlease
– the main trading subsidiary of Discover Leisure.
In 1998 JJB was the largest retailer of its kind in the UK. When KPMG
arrived on the scene the company still had 250 open stores and 55 fitness clubs.
The business was formed in 1971 when it acquired a sports store first opened in
1900. By 1994 it had 120 stores, when the company was floated.
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