JJB Sports Axes 800 Jobs As Profits Plunge

JJB Sports, one of Britain’s largest high street chains, is cutting 800 jobs after seeing profits fall by almost 30 per cent in the past year.

The retailer, which has been hit by England’s failure to qualify for the Euro 2008 championships, said that it had no alternative but to close 72 of its 420 stores.

The move comes just a day after Ethel Austin, a discount fashion chain, fell into administration, putting 2,800 jobs at risk. Nearly a dozen retailers have gone out of the business since the start of the year as the sharp spending slowdown buffets the sector.

Mintel, the market research specialist, today warned that three in five adults were cutting back because of growing fears over the health of the economy.

Chris Ronnie, JJB’s new chief executive, insisted that the store closures announced were not directly linked to the downturn, but instead reflected an effort to clean-up the business.

He told Times Online: “We have to get this business into shape. This should have been done three to five years ago.”

However, a trading update from JJB showed that sales over the seven weeks to Easter were 3.5 per cent lower than the same period a year ago.

Mr Ronnie added that demand for the new England away kit, launched by Umbro in February, had been “average to say the least”. “We always said it was the wrong time to launch the product.”

He said that it was clear customer confidence was low, but warned that constant media coverage was exacerbating the problem. “Every time you turn the TV on you hear about a slowdown, it’s bound to affect people.”

Annual results today showed that sales of England products across JJB Sports fell £23.4 million in the year to January.

The group’s pre-tax profits tumbled 28.5 per cent to £33.8 million on total sales of £811.8 million.

The store closures will cost £25 million over the coming year. JJB, which employs a total workforce of 12,000, said that 1,200 people would be affected by the restructuring, but 400 would be found work elsewhere in the business.

The company plans to put more money into fitness clubs and superstores.

Roger Lane-Smith, the chairman, said: “Whilst we expect current difficult market conditions to continue to affect consumers in the short term, we believe the action we are taking represents a turning point for the Company, which will benefit performance over the medium-term.

The dividend was unchanged at 7p.

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