JJB announces that sale is likely to take place just after administrators are appointed
KPMG ADMINISTRATORS are to arrange a pre-pack administration of struggling sportswear retailer JJB sports.
Brian Green, David Costley-Wood and Richard Fleming (pictured), partners at KPMG, will be appointed as joint administrators this week.
According to a company announcement by the listed retailer, JJB is in final discussions to enter the business into an administration process with a sale to take place very shortly after.
A statement today from JJB said: “It is expected that the process to commence the appointment of administrators of the company and certain of its subsidiaries will begin today, although the actual appointments are only likely to take effect just before the completion of any such sale.”
The company announced on 30 August that it was beginning a formal process to find a buyer, with the company in discussions with several businesses which have now submitted their final offers.
However, the offers are for the trade, assets and brands of the business and not the shares, with the statement informing shareholders that they are unlikely to realise any value in the administration.
In February last year, KPMG organised a second company voluntary arrangement (CVA) at the company in less than two years. In a CVA, an insolvency practitioner consolidates the debts of the business and arranges a repayment deal. In order for the deal to be approved, 75% of creditors, by value of debt, must vote in favour of the proposals and the practitioner will supervise repayments.
JJB, which has struggled since the start of the downturn in 2008, entered into a CVA in 2009.
The retailer has about 180 stores nationwide and employs about 4,000 full- and part-time staff.
Earlier this month, it was reported that the company was under investigation by HM Revenue & Customs for accounting errors relating to VAT mistakes.
The taxman was looking into allegations that the company wrongly charged VAT on children’s clothing which is usually zero-rated.