JJB loses early gains on gym sale

JJB has been in negotiations with banks including Barclays and HBOS

Sportswear retailer JJB's shares closed down on Thursday, having initially jumped after it sold its gym business to former owner Dave Whelan for £83m.

The Wigan-based retailer also reached an agreement with its banks to defer some payments on its £60m debt.

The shares rose by as much as 30%, but excitement faded, leaving the shares to close down 5.4%. Last year, they fell by 97%.

JJB also fired chief, Christopher Ronnie, for gross misconduct.

Mr Ronnie was suspended in January after it emerged that he had used his 27.5% stake in the company as security against loans taken out from the Icelandic bank Kaupthing, which contravened disclosure rules.

Loan deal

JJB said it will continue a standstill agreement with Barclays, Lloyds (formerly HBOS) and Iceland's Kaupthing over its debt, which delayed the dates on some loan repayments.

"In announcing our series of measures today, we have taken the first step in securing JJB's long term future after months of speculation," said Sir David Jones, executive chairman.

Mr Whelan, who sold his stake in JJB in 2007, said he would rename the 52 gyms DW Sports Fitness.

As the owner of Wigan Athletic Football Club, he added that the club's JJB Stadium would now be renamed the DW Stadium.

As part of its agreements, JJB has asked to pay some of its rent on a monthly basis and vary the terms of rental agreements on others.

Conditional on that happening, JJB said it has secured a £25m loan from Barclays and £25m in working capital from Lloyds.

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