JJB’s latest offer to landlords ‘concerning’

The announcement that JJB Sports is to propose a company voluntary arrangement with its landlord creditors needs 'serious consideration' to see how fair it is, says Liz Peace, chief executive of the British Property Federation.

Peace added: "Given that this is the second CVA proposed by the company, it is unsurprising that landlords are expressing concern that they are being asked to agree to concessions again. However, landlords give each CVA proposal very serious consideration and will work to support a viable business where they can and it is in the interests of their shareholders and investors.

"What has concerned landlords are past cases where a retailer has released a store through a CVA and then returned to the same locality shortly afterwards to take a new store on reduced rent. Landlord creditors would also like to see some share of the retailer's future success – should the rescued company return to profit – in return for the income they forgo from helping the business survive. We will be looking to see whether these two concerns have been taken on board when the formal CVA proposal is released later this month."

JJB Sports said today that its "future viability is dependent upon the successful implementation of a company voluntary arrangement involving the compromise and release of certain liabilities owed by the Group to its landlords."

The company used a CVA in 2009 to exit from leases on 140 stores.