Louis Posted October 7, 2008 Report Share Posted October 7, 2008 Shares in ailing sportswear chain JJB Sports hit a record low after an insurer refused to cover suppliers against the firm being unable to pay them. French-owned Coface - one of the world's biggest credit insurers - confirmed it had withdrawn its cover from suppliers dealing with the Wigan-based group. The decision comes a week after JJB posted half-year losses of £9.7 million and its auditors said there was "significant doubt" about its ability to continue as a going concern. Shares in JJB tumbled more than 25% to a record low of 26.25p - valuing the group at just £64.5 million. The slump comes just 15 months after JJB founder and Wigan Athletic chairman David Whelan - who set the business up in 1971 - netted £190 million from the sale of his 29% stake in JJB. The company declined to comment on Coface's decision, which is set to hit the group's cashflow as its suppliers insist on more demanding terms. As well as contending with damning comments from its auditors, JJB was also forced to refute claims that it was in breach of a covenant relating to a £15 million banking facility with Bank of Scotland. Arden Partners analyst Louise Richardson said: "Suppliers are likely to demand better terms which could include up front payments - this will clearly put more pressure on cash flow/working capital requirements. "Suppliers may also decide not to supply at all, which clearly would have an impact on trading particularly ahead of the key Christmas trading season and thus forecasts would be severely under pressure." The group, which has 400 retail stores, has looked to offset its reliance on replica kits by increasing the proportion of "own brand products" in its stores, adding to existing examples such as Olympus, Patrick and Lotto. Quote Link to comment Share on other sites More sharing options...
Jimmy the blue Posted October 7, 2008 Report Share Posted October 7, 2008 Shares in ailing sportswear chain JJB Sports hit a record low after an insurer refused to cover suppliers against the firm being unable to pay them. French-owned Coface - one of the world's biggest credit insurers - confirmed it had withdrawn its cover from suppliers dealing with the Wigan-based group. The decision comes a week after JJB posted half-year losses of £9.7 million and its auditors said there was "significant doubt" about its ability to continue as a going concern. Shares in JJB tumbled more than 25% to a record low of 26.25p - valuing the group at just £64.5 million. The slump comes just 15 months after JJB founder and Wigan Athletic chairman David Whelan - who set the business up in 1971 - netted £190 million from the sale of his 29% stake in JJB. The company declined to comment on Coface's decision, which is set to hit the group's cashflow as its suppliers insist on more demanding terms. As well as contending with damning comments from its auditors, JJB was also forced to refute claims that it was in breach of a covenant relating to a £15 million banking facility with Bank of Scotland. Arden Partners analyst Louise Richardson said: "Suppliers are likely to demand better terms which could include up front payments - this will clearly put more pressure on cash flow/working capital requirements. "Suppliers may also decide not to supply at all, which clearly would have an impact on trading particularly ahead of the key Christmas trading season and thus forecasts would be severely under pressure." The group, which has 400 retail stores, has looked to offset its reliance on replica kits by increasing the proportion of "own brand products" in its stores, adding to existing examples such as Olympus, Patrick and Lotto. Dave Whelan sold out so he is ok, cheap shirts anyone in the liquidation sale Quote Link to comment Share on other sites More sharing options...
DangerMouse Posted October 7, 2008 Report Share Posted October 7, 2008 PLEASE PLEASE PLEASE LET IT BE SO Quote Link to comment Share on other sites More sharing options...
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