JJB on brink of administration

JJB Sports, whose best stores are due to be snapped up by its arch rival this week, has gone from market leader to the brink of administration in less than a decade.

Its story of dramatic rise and fall began when former Blackburn Rovers footballer and Wigan Athletic owner Dave Whelan bought a single store in Wigan in 1971 before an aggressive expansion drive made it the UK's biggest sports retailer with more than 400 stores.

In 2007 Mr Whelan sold his family's holding for £190 million to a joint venture formed by Icelandic financial group Exista and Chris Ronnie, who previously worked at Umbro and Sports World owner Sports Direct.

The group was hit hard by the squeeze on consumer spending triggered by the financial crisis and by the stellar performance of rivals Sports Direct and JD Sports. By late 2008 it was in a battle for survival.

Despite shareholders with deep pockets, such as the Bill and Melinda Gates Foundation, numerous fundraisings and closing half of its stores, it has been unable to revive fortunes. It recently put itself up for sale and is expected to be bought by Mike Ashley's Sports Direct International in a pre-pack administration that will see Mr Whelan's former rival take his pick of the best stores in the estate.

A slide into administration would represent a sad end to a once proud company which traces its roots back nearly a century. The original store was established by JJ Broughton in the early 1900s and was bought by JJ Braddock and then JJ Bradburn.

Mr Whelan, who had previously sold a discount store business to Morrisons founder Ken Morrison, maintained the JJB name and grew the business to 120 stores in 1994 when the company was floated on the stock exchange. Its acquisition of Sports Division in 1998 made JJB the largest sports retailer in the UK.

But by the end of 2008, it had embarked on a major restructuring and refinancing. Its two loss-making leisure footwear brands, OSC and Qube, were placed into administration and the company disposed of its fitness clubs to Mr Whelan's DW Sports for £83.4 million. Recent years have seen it embark on a series of fundraisings from shareholders and more than halve its store estate.

JJB secured its most recent lifeline four months ago when it landed £20 million from US retailer Dick's Sporting Goods and a further £10 million from existing shareholders. It earmarked £20 million of the most recent funding on converting 60 of its most important stores in 2012 and 2013 into a new format which during trials produced much-improved sales and margins.

More dire trading despite the UK's summer of sport left the stricken firm asking shareholders for another cash injection, but this time they ran out of patience, finally forcing the group to throw in the towel and put itself up for sale.