Wigan Athletic shirt sponsor JJB warned investors over its ability to continue as a going concern.
Shares in JJB Sports nearly halved in value yesterday after the firm axed its half-year dividend and reported interim losses of £9.7 million.
JJB have sponsored Wigan Athletic since the 1994/95 season and Wigan Athletic have been a good advertising tool for the sportswear company.
Wigan Athletic’s sponsorship deal with JJB ends after this 08/09 season and the Latics are actively looking at new investors not only for the football shirts but also for naming rights on the stadium, the trouble is the world is in financial crisis and there couldn’t be a worse time to find new sponsors.
JJB was founded by Wigan Athletic FC owner Dave Whelan, who last year sold a 29 per cent stake in the sports retailer to Icelandic investor Exist and JJB chief executive Chris Ronnie.
Ronnie, the former right-hand man of Mike Ashley, the billionaire boss of rival chain Sports Direct, insisted that management would stay "calm and focused" as it faced up to deteriorating trading conditions. He added: "Whilst we remain extremely cautious about the current economic climate, we are convinced that our business model is right."
The group, which has 400 retail stores, has looked to offset its reliance on replica football kits by increasing the proportion of "own-brand products" in its stores, adding to existing examples such as Olympus, Patrick and Lotto.
As part of a business review, it has increased the frequency of deliveries to its stores, introduced a staff incentive scheme and opened a training academy in Wigan. But JJB's fortunes have been hit by its exposure to the replica kit market and the failure of any of the home nations to qualify for Euro 2008 .
Its not just Wigan Athletic’s sponsors that are in trouble, there is XL, who sponsored West Ham shirts, they went bust earlier this month, AIG who sponsor Manchester United and Newcastles Northern Rock both had to be rescued by the US and UK governments respectively.
Hull City shirt sponsor Kcom have reported a 13% down turn in value this week and the company’s value has halved since Hull City gained promotion in May, and Stoke City are sponsored by the Britannia Building Society and mortgage lenders are having big problems.... the society has declared a 36% loss.
Middlesbrough shirt sponsors Garmin-sat nav, have also revealed that they are expecting a rough year and their share value has halved since July.
To be continued..