2. Company Info
• JJB Sports is a PLc, founded by David Whelan.
• JJB can't help you with natural ability, but it sells just about everything
else you need for sports. JJB, one of the UK's largest sporting goods
chains, operates about 185 stores in England and Ireland, including
superstores that feature such amenities as basketball courts.
The shops offer apparel, footwear, bicycles, and golf gear, among other
athletic equipment and accessories. The company also sells its own
brands such as Mind, Body & Soul, Travel Fox, and Pro Performance.
3. Marketing
• When JJB first started they relied on a national market but then when JJB Sports launched
their shopping site, JJB Sports Store, with a view to expanding their market, they went on to
go virtual and electronic market places.
• The business operates in a primary, secondary and tertiary sector because JJB owns their
own shoe making company called Original Shoe Company so they get the raw materials and
produce goods and luxury items. Then distribute these goods in their shops and online.
4. Bill Gates Foundation Investment
• The Bill and Melinda Gates Foundation, the charity set up by the founder
of US software giant Microsoft, were huge investors, investing more than
£200m in JJB. But with losses continuing to mount - they totaled £100m in
2011 - JJB has continued to struggle.
• Also Dick’s sporting service was to invest £20 million but decided to pull
due to the following events at JJB
5. Fined for price fixing
• The Office of Fair Trading (OFT) found that the firm fixed prices for top selling
short-sleeved adult and junior shirts for the England team and Manchester United.
They received a huge fine, almost £8.4 million, as did their competitor Umbro who
received a fine of £6.6 million.
• Mr. Ronnie, who is 50, was the chief executive between 2007 and 2009.He has
been charged with three counts of fraud, two money-laundering offences and two
counts of furnishing false information, according to the SFO. The other man in
court was David Ball, 51, whose company Fashion and Sport Ltd was a supplier to
JJB. The Serious Fraud Office said investigations into other possible offences by
others were continuing. Mr. Bell is an accountant and joint owner of the JJB
supplier Fashion & Sport Ltd. He is charged with three offences of furnishing false
information.
• These events may have contributed to the downfall of the company, as
confidence may have been reduced by the investors.
6. Administration
• JJB, once Britain's biggest sports retailer, finally collapsed into
administration after weeks of negotiations failed to secure the future of
133 shops and 2,200 staff. The Wigan-based company, which was worth
more than £1bn in its heyday, called in administrators from KPMG after
attempts to sell the business foundered, despite initial interest from more
than 100 parties including the company's founder Dave Whelan.
• The administrators only managed to sell 20 JJB stores, the brand and the
website to its arch-rival Sports Direct for £24m, saving 550 jobs in the UK,
including warehouse staff. The shops are expected to be rebranded as
Sports Direct
7. How could they have improved
•
Profitability
1. Reduce the number of employees where possible which would reduce your variable costs.
Increase online services to do this. You would also reduce any rents payable on shop premises,
again reducing variable costs , and fixed costs if the property was owned.
• 2. Temporary pricing promotions might increase sales but may also reduce profit margin. They
could have found a product which differentiated them from other competitors, it will attract
more customers increasing their market share, and maybe able to charge more for the product
increasing profitabilty.
• 3. Analyze marketing and advertising expenditures with an eye toward spending less but
retaining effectiveness.
• 4. Close locations that are under performing.
• 5. Reduce or eliminate expansion plans for 2008.
• 6. Analyze inventory to maintain an optimum levels to avoid unnecessary expense of stocking.
