Sportswear retailer JJB has turned to Microsoft founder Bill Gates and other investors to raise more than £30 million to prevent its collapse.
The group, which employs 6,300 staff, warned earlier this month it was likely to violate the terms of a £25 million loan as trade, hampered by the weather, continued to deteriorate.
The company, which was forced to raise £100 million in a rights issue just 12 months ago, said it had agreed in principle to raise the cash with two major shareholders as well as the Bill & Melinda Gates Foundation Trust. The Bank of Scotland will also waive the loan covenant it was set to breach at the end of January.
Furthermore, the board revealed John Clare has stepped down as chairman. The former Currys, Dixons and DSGi chief executive will be replaced Mike McTighe, a former chief of global operations at Cable & Wireless.
The announcement came as JJB said sales had continued to be below expectations as the heavy snowfall and freezing temperatures sweeping the country continued to damage performance.
JJB has struggled in the past couple of years, during which it has been the subject of separate investigations by the Serious Fraud Office, the Office of Fair Trading and the Financial Services Authority.
The Wigan-based retailer, which operates nearly 250 stores, recently revealed that a major promotional drive had failed to deliver results.
The company said the poor trade flagged up earlier this month by chief executive Keith Jones had continued, with like-for-like sales between November 8 to December 19 decreasing by 15.7%.
JJB said Harris Associates and Crystal Amber, the company’s two largest shareholders, had agreed with Invesco Perpetual, the major shareholder in Crystal Amber, and with Bill & Melinda Gates Foundation Trust and GoldenPeaks Capital to support a proposed cash call of £31.5 million. The Bill & Melinda Gates Foundation trust bought a 3.14% stake in JJB in July 2009.
In the boardroom, as well as losing Mr Clare, Dave Williams has replaced Lawrence Coppock as chief financial officer. Mr Clare, who took up the position a year ago, said he decided to make way for a chairman with more “restructuring experience” in light of the difficulties faced by JJB.