Objection to JJB store closure plan

0

JJB Sports is facing a fight with fellow retailers over its plans to close up to 95 unprofitable stores

Ailing high street chain JJB Sports is facing a fight with fellow retailers over its plans to close up to 95 unprofitable stores.

The Sunday Telegraph said one of the country’s biggest retailers has called for an emergency industry meeting to discuss JJB’s use of a controversial company voluntary agreement (CVA) for the second time in two years.

Under the scheme, JJB will seek to revise tenancy agreements for those shops that are no longer making money and facing closure. It has warned that it will go into administration if the CVA is not supported by at least 75% of its unsecured creditors and more than 50% of its shareholders.

The retailer, who has not been identified, called on the industry to withhold rent payments to landlords if they support the JJB plan.

He said: “This cannot be allowed. Every retailer would love to be able to dump their worst performing stores.

“We will call a meeting of all the major retailers to fight back against JJB’s plans. We will tell landlords that if they accept this, we will consider whether or not to pay our rents.”

Landlords have also expressed concern about JJB’s plans.

Liz Peace, chief executive of the British Property Federation, said: “What has concerned landlords are past cases where a retailer had released a store through a CVA and then returned to the same locality shortly afterwards to take a new store on reduced rent.”

The company has said it will shut 45 stores in the next 12 months and keep 50 on review for two years, but has identified 150 branches which are “core” to the group’s future.

The properties which fall under the CVA plans represent 40% of annual rent payments, JJB said. The CVA involves reducing rent for stores set for closure and paying rent on these stores monthly rather than quarterly.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.