US backers warn over JJB Sports

THE future looks bleak for JJB Sports this weekend after a warning that it had ‘a very big mountain to climb’.

Backer Dick’s Sporting Goods, based in America, told its investors that JJB faced an uncertain future and there was a ‘question’ over whether it could ‘measure up’. Dick’s is understood to have considered taking outright control. It has been the main anchor for the retailer this year after it agreed to invest £20million in April to see it though the Euro 2012 football championship and the Olympics.

However, JJB has already complained that it failed to capitalise on the football tournament. It said last month it would need to bring forward its next plea for funding, originally due for the first quarter of next year.

Many experts now see JJB’s best hope as a rescue investment to restructure and close some stores.

Dick’s chief executive Ed Stack told analysts there were no plans to invest more in JJB until spring.

And he also raised the prospect that the Pittsburgh-based group could use a financial loophole, its $30million (£19million) of convertible debt, to give it ‘the ability’ to gain more control.

Without more cash, JJB might collapse, allowing an investor to buy back the most profitable stores from administrators.

However, the window is closing on a rescue deal. The retailer has only weeks to signal to brands that it will still be around next spring or risk them pulling the plug on orders for new stock.