JJB Sports is a struggling sports equipment retailer who is looking for some investors and finally received the news of takeover by its competitor JD Sports Fashion. The company has also tapped investors for £31.5m fundraising.
JJB Sports has announced that its funds can fall short by the end of March, if the group's trading cash flow or cash management actions fall below forecast. Releasing this news causes worry among investors and staff members. JJB Sports has 250 retail stores with 6300 staff employed across these stores.
At present JJB has managed to raise £31.5m but they need more funds. Group said that it will not able to raise more funds without a broader restructuring of the group's portfolio of stores and cost base. This means that to raise the additional funds, JJB has to sell its major stores, with associated redundancies, among other measures.
Although JD has not declared officially that it will take over JJB Sports, who is struggling for survival for about two years. JD and JJB sports are on initial discussions to carry the potential offer.
Last month only, JJB Sports has offered JD sports for the takeover as JD Sports Fashion has a market capitalisation of £424m.
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