Lessons To Be Learned As ‘JJB Prepares For Administration’

Expert Calls On Businesses 'To Evolve And Adapt'

25.09.2012

JJB Sports’ announcement that it plans to appoint administrators has highlighted some of the factors which can cause a company historically seen as a success story to fall into difficult times, according to a leading insolvency expert.

Shares in the retailer, once one of the biggest players in the sports market, have been suspended as speculation mounts that it will enter administration this week.

JJB was originally established by Dave Whelan in the 1970s, with the Wigan Athletic owner then selling his holding in the company for £190 million to a joint venture including financial group Exista and Chris Ronnie.

The fate of 4,000 jobs across 180 stores in the UK is expected to be considered in the coming days, with commentators suggesting that the rise of competitors such as Sports Direct has impacted on its success.

Chris Jones, a Partner and expert in corporate recovery at Irwin Mitchell’s Manchester office, said that the announcement was unsurprising following weeks of speculation.

He explained: “This news has been expected for some time and it appears that a number of factors have driven the retailer to this point.

“Among them appears to be the over-reliance on the high street, which has seen the company focus on this area while competitors have expanded and made better use of online assets. Alongside other retailers, it simply appears to have failed to properly compete.

“There may be significant lessons for other companies to learn from this, particularly the fact that they need to carefully consider their structure and business models with a view to ensuring they remain a real competitor.

“The fate of this company – once a great success story – demonstrates the need to be prepared to evolve and adapt to changing times and the various fluctuations in the economic climate.”