Page last updated at 21:57 GMT, Thursday, 24 September 2009 22:57 UK

JJB Sports sees losses increase

JJB Sports sign
JJB is under investigation by the SFO

JJB Sports has reported a £42.9m loss for the six months to July, after admitting it had been on the brink of going into administration.

The loss at the Wigan-based sportswear chain compared with a deficit of £14.8m in the same period a year ago.

JJB, together with Sports Direct International, is being investigated by the Serious Fraud Office (SFO) over a suspected sports retail cartel.

The SFO's investigation was focused on individuals, not the company, JJB said.

"The directors do not believe that the company has committed any offences under the Fraud Act," JJB said in a statement.

Greg Hodge, head of research at Planet Retail, said the future was looking "very bleak" for JJB.

"The SFO investigation is going to be very interesting," he said. "I think it's going to be very, very difficult for them to recover from this."

Shares in JJB fell 8% when the London market opened but clawed back much of the loss to close 2.5% lower.

Stock shortages

Sales at JJB fell 21% compared with the same period a year earlier.

The company's financial health is in sharp contrast to rival retailer JD Sports. On Tuesday, JD reported an 11% rise in profits, with sales growth of 8.4%.

"What we have achieved to date and the volume of work which remains to be done is a reminder of the state of financial health in which the company found itself at the start of the year," said JJB chairman Sir David Jones.

"Today's announcement shows a marked decline in ongoing retail operations compared to the same period last year largely because of stock shortages in our stores during the period."

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