The trading crisis at sportswear retailer JJB has deepened as the embattled company warned sales continue to perform below expectations.
The group, which last year stayed afloat thanks to a restructuring deal with landlords, also warned heavy snowfall and freezing temperatures sweeping the country could further hurt performance.
The trading slump means JJB expects to breach certain financial covenants – an agreement between a company and a creditor that it should operate within certain limits – over a £25 million Bank of Scotland loan.
It said it was engaged in “constructive discussions” with BoS about the breach due at the end of January and the future financing of the business.
The group said since its last update three weeks ago conditions had “remained extremely challenging” and with just two months of Christmas and New Year trading remaining, the full-year outlook remains uncertain.
The Wigan-based retailer, which operates nearly 250 stores and employs more than 6,300 staff, recently revealed a major promotional drive to protect its “Serious about Sport” turnaround strategy, had failed to deliver results.