Sportswear chain JJB was saved from administration on Monday after creditors nearly unanimously voted in favour of its Company Voluntary Agreement (CVA). The agreement enables the firm to restructure and write off much of its debt and change its quarterly rental payments on stores to a monthly time frame. Unless challenged in the courts, the move will mean 12,000 jobs are protected at the chain's remaining 250 stores. JJB had struggled since the end of last year, after issuing a profit warning.
Richard Flemming of accounting firm KPGM, which helped draw up the CVA, said it was 'groundbreaking' and showed that an 'innovative approach' to restructuring could enable more companies to stay in business. The rescue of one of the high street's most recognisable sports retailers was widely covered by the media, with reports concentrating on the 12,000 jobs that had been 'saved'.
Who are the PR players?
Maitland has been proving the firm with strategic communications and media relations advice throughout the restructuring process.
What happens next?
Priority number one for the new management team is to rebuild JJB's battered reputation with shoppers and the City. Landlords and lending institutions do not like to accept reduced payment on debts and JJB will have to run a tight financial ship going forwards. JJB may also find friends hard to find if this ushers in a raft of CVAs among companies looking to reduce their debts by writing chunks off. However, it is keen to communicate its cost savings, and the sale of its gyms and private helicopters have been well received.
£20m - The amount JJB's 120 closed stores were costing the firm each year.