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Exclusive: JJB Sports Boss Poised To Quit

(c) Sky News 2012

The chief executive of JJB Sports is poised to step down after a string of profit warnings and emergency fundraisings left shareholders in the company facing a bleak future.

I have learned that Keith Jones, who has run JJB (LSE: JJB.L - news) only since March 2010, is expected to leave within days. Directors of the company are understood to be discussing the departure of Mr Jones this evening and an announcement could be made as soon as Friday morning.

JJB has endured a torrid few years during which it has been rescued three times by investors and axed dozens of stores in a desperate survival bid.

JJB’s shares plunged a week ago after it disclosed that the Euro 2012 football tournament had failed to produce the anticipated uplift in sales.

It was the latest in a string of profit warnings and raised fears that the company would not last until the key Christmas trading period without a fresh cash injection.

"In light of the deterioration in trading, the Directors have sought to implement a combination of management initiatives, which were identified in the 2012 Results, and have been successful in mitigating the trading and cash shortfall to a certain extent.  However these actions have not fully mitigated the shortfall,” the company said.

"As a consequence, and in light of the continuing poor macroeconomic environment, the level of future headroom on working capital facilities and financial covenants will be significantly reduced in the short and medium term.

"This is likely to accelerate the timing of the additional funding required, which is dependent upon the trading performance of the business and the successful implementation of the management initiatives. Given the potential requirement to accelerate funding to implement the turnaround, the Group is in discussions with its strategic partners."

Earlier this year, JJB struck a deal with Dick’s Sporting Goods, the giant US retailer, to take a stake in the British company that could rise as high as 60%.

Yet while high street trading has been tough, JJB's rival, Sports Direct (Frankfurt: A0MK5S - news) , has enjoyed contrasting fortunes, recently posting a 24.5% surge in pre-tax profits to £151.5m.

JJB also announced this month that Mike McTighe, its chairman of nearly two years, would step down to be replaced by Bob Corliss, a veteran of the US retailer The Athlete's Foot.

Mr Corliss said at the time of his appointment: "JJB has been through some difficult times yet it is clear that there is a real market opportunity for a national authentic sports retailer here in the UK.

"JJB can be that retailer and I'm energized by the prospect of leading the company through the next phase of its turnaround."

It's unclear if Mr Jones will be directly replaced or whether Mr Corliss will take on the running of the business.

Mr Jones joined JJB from Dixons, where he was group retail director, before which he worked at Virgin Retail and B&Q.

JJB declined to comment.