JJB shares fall after investment write off
By Mark Fordham
Shares in retailer JJB Sports have plummeted 24 per cent after its US shareholder wrote off the investment it made in April.
Dick's Sporting Goods, which took a three per cent stake in JJB earlier this year in exchange for a £20 million investment, took an impairment charge worth around the same amount.
This means that the entire investment in the company was virtually wiped off.
JJB's share price fell to £3.30 in London trade after the news broke.
The company is currently in the middle of a cost-cutting programme that is designed to halt losses that totalled £100 million last year.
Chief executive at Dick's Sporting Goods Edward Stack said the firm had taken out its investment as JJB's performance had "materially deteriorated from its expectations".
"As we indicated at the outset, this is a high-risk investment that was structured to provide us with meaningful upside and capped downside," Mr Stack added.
16 August 2012, 10:26