Source Pravda.Ru

JJB Sports faces profit issues after Christmas price reduction

The second largest maker of sports goods in the UK, JJB Sports, reported that its second-half profit would be lower than in 2007 after it decided to reduce prices for stock clearing.

The profit is expected to be a little lower than 27.4 million pounds in the same period of 2007. JJB cut its prices for Christmas period by as much as 90 percent to attract more customers’ attention to its products.

The sports maker said on November 29 that second-half profit would be similar to the level reported in the previous year. The retailer added that it expected to get no “incremental revenues” after England failed to qualify for the Euro 2008 soccer championship.

The sportshop chain was founded in 1971, when ex-footballer Dave Whelan acquired a single sports shop in Wigan. The original store was established by JJ Broughton in the early 1900s and was then bought by JJ Braddock and then JJ Bradburn. As these initials were all the same the business was known locally as JJB's. When Whelan bought the store from John Bradburn he maintained the JJB name.

During the early 1990s, the store portfolio grew to 120 stores by 1994, at which point the company was floated on the London Stock Exchange. In 1998, JJB Sports acquired the business of Sports Division (which was JJB's largest competitor at the time). The acquisition then made JJB one of the largest sports retailers in the UK., focusing on sports 'clothing' rather than sports 'equipment'.

Duncan Sharpe, chief executive of JJB sports committed suicide in 2002. Mr Sharpe had been with JJB Sports for 19 years and was the son-in-law of the firm's founder David Whelan. By 2005, JJB had expanded to over 430 stores throughout the UK and Ireland. It had also opened a new branch in Amsterdam in 2002.

On 8 June 2007, Whelan sold his residual 29% stake in the firm for £190 million to Icelandic financial group Exista and Chris Ronnie, a sports retailer who previously worked at Umbro and Sports Direct.

On the 19th October 2007, JJB bought a 10.1% stake in Umbro in a move to protect its stake in the market for England football shirts

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