JJB.L Share News (JJB)

(Adds background, detail, analyst comment, share price) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Sportswear retailer JJB Sports PLC (JJB.LN) Thursday reported a 22% rise in sales at its stores open more than a year in the six weeks to July 4, boosted by sales of replica soccer shirts throughout the ongoing soccer World Cup. Wigan, U.K.-based JJB said sales have remained in line with its expectations since it last updated the market in May, despite England's "premature" exit from the soccer tournament. Replica soccer shirts are a big sales driver for the company, which has begun to re-position itself as a "Serious about Sport" retailer focusing on sports goods and equipment. JJB said comparable sterling gross margin climbed 54.5% in the six week period, giving an overall comparable gross margin over the same period of 43.9%. Margins were boosted by a later start to its summer sale, which began 10 days later than last year on July 1. Singer Capital Markets analyst Matthew McEachran told clients that JJB's update is likely to be well-received, but cautioned that as the summer sale has only just begun it is too early to know its impact on margins. JJB late last year staved off an administration with a GBP100 million fundraising, after it became saddled with a growing debt mountain, outdated stores and sliding sales. As part of the group's plan to revive its fortunes it is re-fitting stores. Its first store to be re-fit and trialed is in Slough, Berkshire. JJB said since its reopening sales at its Slough store are up 9% on the company average, while margins have improved 17%, in line with what it expected. A further four stores will be refitted before the autumn, to "test the learnings from Slough in different store environments," JJB said. The company's update comes ahead of a site visit for analysts Thursday to the new concept store. Numis Securities analyst Nick Coulter upgraded JJB to a "buy" rating from "add," and in a note to clients said the performance of the Slough store so far represents "an extremely encouraging outturn." But Seymour Pierce's Freddie George remains cautious on the outlook for JJB's business, saying much work still needs to be done. "With significant losses still forecast for 2011 and 2012 it will be a long haul to build confidence with the suppliers and improve the credibility of the format," he told clients. JJB earlier this year posted a fiscal 2010 loss of GBP68.6 million and said a proper recovery could take up to three years. At 0929 GMT JJB Sports shares were trading 1 pence, or 5.8%, higher at 14 pence, outperforming a 0.6% rise in the Dow Jones U.K. Smaller Companies Index. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; hannah.benjamin@dowjones.com (END) Dow Jones Newswires July 08, 2010 05:43 ET (09:43 GMT)