JJB.L Regulatory News (JJB)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA

ALL DEFINED TERMS USED IN THIS ANNOUNCEMENT HAVE THE MEANING GIVEN TO THEM IN THE CVA PROPOSAL DOCUMENT PUBLISHED BY THE COMPANY ON 3 MARCH 2011, UNLESS OTHERWISE DEFINED HEREIN

15 March 2011

JJB Sports plc

Statement re current trading, revised business plan

and proposed financing arrangements

Further to the publication by JJB Sports plc ("JJB" or the "Company") on 3 March 2011 of the details of its proposed company voluntary arrangements ("CVA Proposals") and proposed cancellation of its listing on the Official List and Main Market of the London Stock Exchange ("Delisting") and admission to trading on AIM ("Admission to AIM"), the Company today announces key details of its revised business plan and proposals to provide the necessary financing for its implementation.

Highlights

·; Since the Company's last trading update included in the Prospectus on 2 February 2011, management's expectations of trading for FY11 have remained unchanged. Despite current economic conditions making accurate forecasting difficult, the Company has, over recent weeks, been achieving its internal expectations in relation to trading. 

·; The Company continues to obtain very encouraging results from the six transformed stores. The Board continue to carefully manage cash and available resources ahead of anticipated completion of the restructuring and refinancing towards the end of April.

·; The Company has finalised a revised business plan with the aim of restoring the viability of the Group's business model and returning the business to profitability in the longer term.

·; The revised business plan aims to re-establish and promote JJB as a trusted sports retail brand by improving its store portfolio and product proposition, continuing to develop its multi-channel offering and strengthening its people and service offering. The Company intends to continue its cost reduction initiatives and tight management of working capital.

·; In order to implement the revised business plan, the Company is intending to raise £65 million (before expenses) by way of a firm placing and placing and open offer.

·; The Company has reached agreement in principle with each of its major shareholders - Harris Associates, Crystal Amber, Invesco Asset Management and Bill & Melinda Gates Foundation Trust - to participate in the proposed capital raising up to an aggregate amount of £65 million, subject to a number of conditions.

·; In addition, it is intended that certain otherexisting shareholders and other institutions will be invited to participate in the proposed capital raising as part of a bookbuild, which is being led by Numis. It is expected that this bookbuild will be completed on or around 4 April 2011.

·; Subject to market and other customary conditions, it is intended that the proposed capital raising will be underwritten by Numis.

·; The Company will only launch the proposed capital raising if the CVA Proposals are approved at the meetings of creditors and shareholders to be held on 22 March 2011. If the CVA Proposals are then successfully challenged, or the subject of a challenge that can not be resolved within a timescale which would allow the receipt of proceeds on or before 30 June 2011 (being the Longstop Date set out in the CVA Proposal Document), then the proposed capital raising will not proceed.

·; In addition, the Company has reached agreement with its lender, Bank of Scotland plc ("BoS"), for the provision of a committed working capital facility of £25 million through to 31 May 2014, subject to the completion of certain conditions precedent including the receipt of proceeds under the proposed capital raising.

·; The Board is of the opinion that, subject to the successful implementation of the CVA Proposals, the proposed £65 millioncapital raising (before expenses) and provision of the £25 million committed working capital facility by BoS would provide the Company with sufficient working capital for its present requirements and enable it to implement the revised business plan.

·; The Company's principal suppliers and strategic partners, adidas group and Nike, remain strongly supportive of JJB and its future plans. They, together with other suppliers, continue to work positively and constructively with the Company.

Commenting on the revised business plan and proposed capital raising, Mike McTighe, JJB Chairman, said:

"JJB's restructuring continues as planned. The proposed £65 million capital raising and the continuing support from our major shareholders and our lender, Bank of Scotland, will provide us with the working capital we believe we need to implement our revised business plan. The whole management team remains focused on this restructuring and committed to delivering a stable future for JJB and its employees.

"We continue to engage with all of JJB's stakeholders, including landlords, shareholders, our lender, suppliers and our colleagues. Today's announcement is the result of this ongoing dialogue and we are continuing to build real momentum among this 'coalition of the willing'.

"The next key stage in the process is the creditor and shareholder votes next week. The Board remains confident of the success of this turnaround and the future prospects for the Company."

This summary should be read in conjunction with the full text of the announcement set out below.

Enquiries:

Notes to editors

About JJB Sports

JJB Sports plc (JJB: LSE) is one of the UK's leading sports retailers. The Group, headquartered in Wigan and today listed on the Main Market of the London Stock Exchange, currently trades from 246 JJB branded retail stores in the UK and Ireland and employs over 6,100 people. Further information about the Group can be found on the Group's corporate website, www.jjbcorporate.co.uk.

Important notice

Each of Lazard and Numis is authorised and regulated in the UK by the Financial Services Authority, is acting for JJB and no-one else in connection with the proposed capital raising and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the proposed capital raising and will not be responsible to anyone other than JJB for providing the protections afforded to its clients or for providing advice in relation to the proposed capital raising or any other matters referred to in this announcement.

This announcement is not a prospectus and investors should not subscribe for any new ordinary shares referred to in this announcement except on the basis of the information to be contained in the prospectus that will be published in connection with the proposed capital raising. This announcement does not constitute an offer to sell, or a solicitation of an offer to subscribe for the new ordinary shares being issued in connection with the proposed capital raising.

The distribution of this announcement and/or the prospectus to be published in connection with the proposed capital raising into jurisdictions other than the United Kingdom may be restricted by law. Persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, the information contained in this announcement is not for publication or distribution, directly or indirectly, in or into the United States of America (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, Japan or South Africa. This announcement does not contain or constitute an offer for sale or the solicitation of an offer to purchase securities in the United States, Australia, Canada, Japan or South Africa. Any new ordinary shares to be issued in connection with the proposed capital raising have not been and will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered in the United States absent registration or an exemption from the registration requirements of the Securities Act. There will be no public offer of the new ordinary shares to be issued in connection with the proposed capital raising in the United States.

Neither the content of the JJB corporate website nor any website accessible by hyperlinks on the JJB corporate website is incorporated in, or forms part of, this announcement.

Forward looking statements

Certain statements made in this announcement constitute forward-looking statements. Forward looking statements can be identified by the use of words such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "plan", "seek", "target", "continue" or similar expressions and relate to, among other things, the performance of the business of JJB in the near to medium term, the business strategy of JJB and its plans and objectives for future operations, including those set out in the revised business plan. Such statements are based on current expectations and, by their nature, are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or performance, expressed or implied, by the forward-looking statement. Factors that might cause forward looking statements to differ materially from actual results, include among other things, general economic conditions in the United Kingdom. These forward-looking statements speak only as of the date of this announcement. The information and opinions contained in this announcement are subject to change without notice and, subject to compliance with applicable law, JJB assumes no responsibility or obligation to update publicly or review any of the forward-looking statements.

Unaudited financial results, potential cost savings and targeted sale and margin progression

References in this announcement to FY11, FY12 and FY13 etc are to the 52 week period ended or ending in January 2011, 2012 and 2013 etc respectively and references to financial results for FY11 are to the unaudited results for FY11 extracted without material adjustment from unaudited management information relating to the Group. The Company intends to publish its audited results for FY11 in May 2011.

Potential cost savings have been calculated on the basis of JJB's existing cost and operating structure. The achievability of such savings and estimated costs of achieving such savings relate to future actions and circumstances which, by their nature, involve risks, uncertainties and other factors. As a result, the potential cost savings referred to in this announcement may not be achieved, or the savings achieved could be materially different from those estimated.

The statements relating to targeted sales and margin progression relate to future actions and circumstances, which, by their nature, involve risks, uncertainties and other factors. As a result, the targeted sales and margin progression referred to in this announcement may not be achieved, or the progression achieved could be materially different from that estimated.

None of the unaudited results for FY11, the potential cost savings or the statements related to targeted sales and margin progression constitute or are intended to constitute a profit estimate or profit forecast and should not be interpreted to mean that actual earnings for FY11 or prospective earnings for FY12 and/or any subsequent financial years would necessarily match or be greater than those reported for FY10 or for any preceding financial year.

JJB Sports plc

Statement re current trading, revised business plan

and proposed financing arrangements

1. Current trading and outlook

The Company last updated on current trading in the Prospectus dated 2 February 2011 to the period to 23 January 2011. Since this update, management's expectations of trading for FY11 have remained unchanged.

On a like-for-like (excluding VAT) basis, revenue for the period from 24 January 2011 to 13 March 2011 (a period that straddles the end of FY11 and the beginning of FY12) was 13.5% lower than for the equivalent period last year. Total Group revenue for the same period was down 14.6%. Overall gross margin for the same period was 36.3% compared to 40.4% during the equivalent period last year.

Net debt at 13 March 2011 was £9.1 million.

The Company continues to carefully manage its cash and available resources. As a result of the Company's cash management actions, the Company's intake, availability and profile of stock has been lower than forecasted.

Economic conditions mean that prospects for UK retailers remain challenging with volatility making accurate forecasting difficult. However, over recent weeks, the Company has been achieving its internal expectations in relation to trading. The need for effective promotion to stimulate sales and generate cash, albeit at the inevitable expense of margin, continues.

The performance of the six transformed stores continues to be very encouraging, with sales 16% above the Company average and money margin 30% above the Company average, measured in the period from 1 November 2010 (when the last of the six transformed stores opened) to 13 March 2011 (as noted above, a period that straddles the end of FY11 and the beginning of FY12).

2. Revised business plan

The Company has finalised a revised business plan with the aim of restoring the viability of the Group's business model and returning the business to profitability in the longer term. In addition, the working capital exercise by the Company's advisers has now been substantially completed. In order to implement the revised business plan, as described below, the Company is intending to raise £65 million (before expenses) by way of a firm placing and placing and open offer.

Key elements of the revised business plan

The Company's aim is to build a market leading sports retail brand by catering to a broad range of customers, from spectators to performance athletes. Key elements of the plan include:

·; Rightsizing the store portfolio through implementation of the CVA Proposals.

·; Building on the success of the investment in the six transformed stores, management intends to continue to invest in the store portfolio through three levels of store and proposition development - retail basics, refresh refit and full transformation - as described below.

·; Improving the basic retail disciplines in the business, including stock selection, buying, allocation, replenishment and clearance markdown management. This will enable the business to align stock packages to type of store, improve stock availability and clear old stock.

·; Continuing to source new ranges including exclusive and differentiated products from all key suppliers and to develop exclusive branded products such as Run 365 and Slazenger Golf.

·; Promoting new product and service propositions as part of a co-ordinated marketing plan, alongside regular campaigns such as the successful Footwear Recycling initiative, and aligning promotion and advertising to key sporting and other special events such as this year's '40th Anniversary' of JJB.

·; Focusing on training by extending customer service and product knowledge training to all colleagues. Personal development programmes, to be launched in March 2011, will focus on 'stepping into management' and provide a clear career ladder for new and existing colleagues. Management will also introduce a performance management process with associated incentive and reward programmes with a view to delivering short and long-term improvements across the business.

·; Improving the multichannel proposition including broadening the online range by introducing online exclusives, expanding the collect@store offer, developing a mobile version of the website and exploiting catalogue opportunities, all focused on providing customers with the easiest and most convenient ways to shop.

·; Aligning the Company's cost base and working capital investment to meet the needs of the business by exploiting opportunities for efficiencies in warehousing and distribution, stock management, store wages, sales management and the Retail Support Centre (RSC).

Impact of the CVA Proposals

As set out in Paragraph 1 of Part I of the CVA Proposal Document published on 3 March 2011, the main objectives of the CVA Proposals are to:

·; Enable the closure of 43 stores (of which 2 are not currently trading) on or before 24 April 2012 (referred to in the CVA Proposals as the First Period Compromised Leases) and the closure of a further 46 stores on or before 24 April 2013 (referred to in the CVA Proposals as the Second Period Compromised Leases).

·; Reduce the amount payable on the First and Second Period Compromised Leases such that the rent payable shall be 50% of the contractual pro rata monthly rent prior to closure plus an amount equal to 5% of the contractual pro rata monthly rent by way of a contribution in respect of dilapidations (such amounts to be paid on a monthly rather than a quarterly basis) plus the contractual amount payable in respect of turnover rent, insurance and service charge.

·; Provide for an additional payment of between £2.5 million and £7.5 million (to be settled in cash or shares at the option of JJB) to Compromised Landlords that is linked to the performance of JJB and is payable approximately two years from the date of the creditors' meetings to consider the CVA Proposals.

·; Enable each landlord of the First and Second Compromised Leases to require the Company to vacate and end the lease of the relevant property upon giving 45 days notice.

·; Temporarily provide for the rent and other amounts due under the terms of the remaining 147 stores which are not Compromised Leases (the "Non-Compromised Leases") to be paid on a monthly rather than quarterly basis for a period of 24 months from the First Effective Date.

The Group will continue to be liable for rates on the Compromised Leases until those stores are surrendered, forfeited or assigned or the leases are terminated on the date which is the earliest possible date on which a break clause could be exercised under the lease.

To the extent the First Period Compromised Leases are not closed immediately they are likely to continue to incur trading losses. As explained in detail in Paragraph 7 of Part I of the CVA Proposal Document, the First Period Compromised Leases are all significantly underperforming and are not considered by the Directors as having any realistic prospect of turning around their underperformance. This was based on an analysis of the previous three years' trading, anticipated future trading and, where relevant, the size of the store and whether there were other stores with better performance and/or potential in the same area. The Directors considered that such stores could be closed over a period of one year to provide sufficient time for the stores to be vacated in an orderly fashion while giving landlords some time to seek new tenants.

In relation to the Second Period Compromised Leases, the relevant stores will either close or remain open on or before 24 April 2013. As explained in detail in Paragraph 7 of Part I of the CVA Proposal Document, whilst the Second Period Compromised Leases are also significantly underperforming they are considered by the Directors as being stores which may in future turn around their underperformance to trade at a profit if certain commercial terms are changed and/or the stores are refurbished and/or the use of any unproductive space is improved. Further the Directors considered that a review of such stores to determine whether any store could be turned around would take up to two years, allowing a full review given the lengthy stock procurement period.

The following table of unaudited management information illustrates the performance and certain costs of the First and Second Period Compromised Leases in FY11:

Notes:

(1) The net sales, total rent, total store wages and other costs figures shown in this table are for the 52 week period ended 30 January 2011. These figures are unaudited and have been extracted without material adjustment from unaudited management information for the Group for the period.

(2) Other costs relate mainly to service charges, rent premiums, utilities, security, advertising, credit card charges, repairs and maintenance and other general store running costs.

(3) Contribution is defined as net sales less cost of sales and direct store costs, but before allocation of central overheads and depreciation.

Any closures of stores will be phased over the applicable period and savings will accrue accordingly (other than the reduced rental charge which, in accordance with the CVA Proposals as described above, will (excluding payments provided for in the CVA Proposals in relation to dilapidations) be reduced by 50% until 24 April 2012 (in respect of the First Period Compromised Leases) or 24 April 2013 (in respect of the Second Period Compromised Leases). Redundancy costs associated with colleagues leaving the business as a result of store closures are currently estimated to be approximately £0.5 million.

Other potential cost savings and operational efficiencies

As well as the cost savings arising directly as a result of the implementation of the CVA Proposals, management has identified and has either commenced implementation or intend to implement further cost savings through various initiatives. These initiatives include:

·; Reducing warehousing and distribution costs through incremental opportunities afforded through the implementation of the CVA Proposals. Management has identified potential annual cost savings of approximately £3.5 million based on estimated warehousing and distribution costs of approximately £19.0 million in FY11 (source: unaudited management information for FY11).

·; Reducing core store hours by improving the deployment of colleagues in store to match customer footfall. Management has evaluated the potential annual benefit at approximately £3.3 million based on estimated total store wages for the Non-Compromised Leases of approximately £31.9 million in FY11 (source: unaudited management information for FY11).

·; Implementing a range of general cost reduction initiatives across other areas of the business. Management has identified potential annual cost savings of approximately £2.4 million.

The impact of any of the potential savings or efficiencies identified above in FY12 or successive years will depend on the actual date of implementation of the initiatives and the actual period of time taken to achieve the full annualised benefit of such initiatives.

The potential cost savings have been calculated on the basis of JJB's existing cost and operating structure. The achievability of such savings and estimated costs of achieving such savings relate to future actions and circumstances which, by their nature, involve risks, uncertainties and other factors. As a result, the potential cost savings referred to in this announcement may not be achieved, or the savings achieved could be materially different from those estimated.

The Company continues to carefully manage its working capital, cash and available resources. Whilst current stock cover is around 15 weeks, the Company is targeting stock cover of less than 13 weeks through better management of stock intake, improved stock allocation and replenishment and more aggressive in season stock clearance. Working capital is also expected to be improved in a number of other areas.

Investment in the store portfolio and future capital expenditure plans

The Company has been monitoring the progress of the six transformed stores. In the period from 1 November 2010 (when the last of the six transformed stores opened) until 13 March 2011, the aggregate performance of all six stores compared to the Company average was up by 16% on sales and up by 30% on money margin (source: unaudited management information).

Building on the success of the investment in the six transformed stores during the course of 2010, management has devised three levels of store and proposition development and incorporated the following profiles into the revised business plan:

·; Retail basics - this programme, which is currently expected to cover approximately 133 stores in FY12, is aimed at determining the optimal floor space and space allocations for all product categories and creating clearly defined departments by repositioning existing features. The Company's current FY12 capital expenditure plans include expenditure of approximately £4.4 million for basics refit and a payback period of approximately two years is targeted.

·; Refresh refit - this programme, which is currently expected to cover approximately 14 stores in FY12 and approximately 27 stores in FY13, is aimed at remixing the stores' space and improving the customer experience by implementing new external signage and redecorating stores, with a particular focus on the footwear departments. The Company's current capital expenditure plans include expenditure of approximately £1.4 million in FY12 and approximately £2.7 million in FY13 on refresh refit and a payback period of approximately three years is targeted.

·; Full transformation - this programme, which is currently expected to cover approximately 22 stores in FY12 and approximately 28 stores in FY13, is aimed at transforming stores in a manner consistent with the existing six transformed stores and comprises new fixtures and fittings, the installation and extension of a mezzanine floor where appropriate and improved navigation and point of sale. The Company's current capital expenditure plans include expenditure of approximately £6.1 million in FY12 and approximately £7.8 million in FY13 and a payback period of between three and five years is targeted.

In addition, the Company's current capital expenditure plans include approximately £2.5 million in FY12 and approximately £2.3 million in FY13 for general capital programmes including maintenance and IT, which includes website development costs. FY11 depreciation is expected to be approximately £12.6 million (source: unaudited management information).

Management will continually review these current capital expenditure plans in light of the Company's operating performance and experience from completed store refits and will modify such plans accordingly.

Targeted progression in like for like sales

Management has developed the revised business plan by considering like for like sales progressions on a monthly basis for FY12 and FY13 and annually thereafter. When considering like for like sales progression, management has assumed that internet sales will grow by around 20% per annum from approximately £11 million in FY11 (source: unaudited management information).

Management expects a number of factors to impact anticipated like for like sales progression as summarised below.The statements relating to targeted sales progression below relate to future actions and circumstances, which, by their nature, involve risks, uncertainties and other factors. As a result, the targeted sales progression referred to below may not be achieved, or the progression achieved could be materially different from that estimated.

In FY12, the Company is targeting aggregate like for like percentage sales growth in the low single digits. On a quarter by quarter basis, this is expected to break down as follows and some of the key factors that are expected to have an impact include:

·; For Q1, like for like percentage sales are expected to decline in the mid teens as working capital constraints prior to the proposed capital raising are preventing required stock rebalancing and investment. For Q1 in FY11, sales were approximately £77.6 million (source: unaudited management information).

·; For Q2, the rate of decline in like for like percentage sales is targeted to fall to single digits as the business is expected to be able to begin to rebalance and reinvest in stock following the anticipated completion of the proposed capital raising. In addition, management expects to be able to commence the programme of basics refits. For Q2 in FY11, sales were approximately £106.4 million (source: unaudited management information).

·; For Q3, like for like percentage sales growth is targeted in the low teens as management expect all store development programmes to be underway, as well as the business benefiting from the availability of improved stock packages and the impact of better processes. For Q3 in FY11, sales were approximately £92.7 million (source: unaudited management information).

·; For Q4, like for like percentage sales growth is targeted in the high teens as the business is expected to continue to benefit from the initiatives indentified in Q3, sales from the first full quarter of stock bought under the direction of the trading director and weak comparatives in Q4 of FY11. For Q4 in FY11, sales were approximately £86.1 million (source: unaudited management information).

In FY13, the Company is targeting aggregate like for like percentage sales growth in the low teens. On a quarter by quarter basis, some of the key factors that are expected to have an impact include:

·; For Q1, the business is expected to benefit from weaker comparatives in Q1 of FY12, a better planned January sale, the continuation of the store development programme and an improved year on year stock purchase.

·; For Q2, the business is expected to be heavily influenced by the European Football Championships and the Olympics, as well as the continuation of the store refit programme.

·; For Q3, the business is expected to start strongly due to the Olympics with spending expected to be weighted towards the beginning of the quarter.

·; For Q4, the business's performance is expected to be affected by strong comparatives in FY12.

In FY14, the Company is targeting aggregate like for like percentage sales growth in the high single digits as the new business model is expected to have been established, the full year benefits of the store refit programme should be realised and strong multichannel growth is expected. The second half of FY14 is expected to show more growth than the first half as a result of strong comparatives in the first half of FY13 resulting from the impact of the European Football Championships and the Olympics.

Targeted progression in gross margin

The Company's retail gross margin for FY11 is expected to be approximately 37% (source: unaudited management information). Management expect a number of initiatives to improve retail gross margins during FY12 and FY13 including an increase in own brand participation, improved ranging, improved allocation and replenishment, closer management of in-season margin and a reduction in clearance mark-down.

Management are targeting an improved retail gross margin of approximately 45% in FY14 and, based on early indications of improved gross margin at the six transformed stores, believe that there is the opportunity for further retail gross margin progression in FY15 and FY16.

The statements relating to targeted retail gross margin progression above relate to future actions and circumstances, which, by their nature, involve risks, uncertainties and other factors. As a result, the targeted retail gross margin progression referred to above may not be achieved, or the progression achieved could be materially different from that estimated.

3. Proposed capital raising

In order to implement the revised business plan, the Company is proposing to raise £65 million (before expenses) by way of a firm placing and placing and open offer. The Company will only launch the proposed capital raising if the CVA Proposals are approved at the meetings of creditors and shareholders to be held on 22 March 2011. If the CVA Proposals are then successfully challenged, or the subject of a challenge that can not be resolved within a timescale which would allow the receipt of proceeds on or before 30 June 2011 (being the Longstop Date set out in the CVA Proposal Document), then the proposed capital raising will not proceed.

The Company has reached agreement in principle with each of its major shareholders - Harris Associates, Crystal Amber, Invesco Asset Management and Bill & Melinda Gates Foundation Trust - to participate up to an aggregate amount of £65 million, subject to a number of conditions.

In addition, it is intended that certain other existing shareholders and other institutions will be invited to participate in the proposed capital raising as part of a bookbuild, which is being led by Numis. It is expected that this bookbuild will be completed on or around 4 April 2011.

Subject to market and other customary conditions, it is intended that the proposed capital raising will be underwritten by Numis.

Support from the major shareholders, and Numis' intended role as underwriter, is subject to a number of conditions including but not limited to agreement on the issue price of the new ordinary shares, the agreement and execution of a legally binding placing agreement and associated placing letters, the preparation and publication by the Company of a shareholder circular and a prospectus in accordance with the requirements of the Listing Rules and the Prospectus Rules, receipt by the Company of necessary shareholder approvals for the proposed capital raising, including compliance with the City Code as necessary, and admission of the new ordinary shares to listing on the premium segment of the Official List and to trading on the London Stock Exchange's Main Market for listed securities.

The bookbuilding exercise, which is being led by Numis, is expected to close on or about 4 April 2011. If successful, the issue price and number of new ordinary shares to be issued in the proposed capital raising will be determined at the end of the bookbuilding exercise and will be announced shortly after that.

It is proposed that the new ordinary shares to be issued in connection with the proposed capital raising would be admitted to listing on the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities for one to two days prior to Delisting and Admission to AIM.

Further details of the proposed capital raising will be made available in due course. The Company currently expects to launch the proposed capital raising and to publish a shareholder circular and prospectus on or around 5 April 2011 and to have held a general meeting of shareholders and to have received the net proceeds of the proposed capital raising by no later than the end of April 2011.

A summary of the expected timetable for the CVA Proposals, Delisting and Admission to AIM and, subject to the approval of the CVA Proposals, the proposed capital raising, is set out below:

4. Arrangements with BoS

Following supportive discussions with BoS, the Company has reached agreement with BoS in relation to the provision of a committed working capital facility of £25 million through to 31 May 2014. This committed working capital facility will only come into effect upon, amongst other things, satisfaction of certain customary conditions precedent and receipt of proceeds under the proposed capital raising.

5. Key supplier support

The Company's principal suppliers and strategic partners, adidas group and Nike, remain strongly supportive of JJB and its future plans. They, together with other suppliers, continue to work positively and constructively with the Company.

Notes to editors

About JJB Sports

JJB Sports plc (JJB: LSE) is one of the UK's leading sports retailers. The Group, headquartered in Wigan and today listed on the Main Market of the London Stock Exchange, currently trades from 246 JJB branded retail stores in the UK and Ireland and employs over 6,100 people. Further information about the Group can be found on the Group's corporate website, www.jjbcorporate.co.uk.

Important notice

Each of Lazard and Numis is authorised and regulated in the UK by the Financial Services Authority, is acting for JJB and no-one else in connection with the proposed capital raising and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the proposed capital raising and will not be responsible to anyone other than JJB for providing the protections afforded to its clients or for providing advice in relation to the proposed capital raising or any other matters referred to in this announcement.

This announcement is not a prospectus and investors should not subscribe for any new ordinary shares referred to in this announcement except on the basis of the information to be contained in the prospectus that will be published in connection with the proposed capital raising. This announcement does not constitute an offer to sell, or a solicitation of an offer to subscribe for the new ordinary shares being issued in connection with the proposed capital raising.

The distribution of this announcement and/or the prospectus to be published in connection with the proposed capital raising into jurisdictions other than the United Kingdom may be restricted by law. Persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, the information contained in this announcement is not for publication or distribution, directly or indirectly, in or into the United States of America (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, Japan or South Africa. This announcement does not contain or constitute an offer for sale or the solicitation of an offer to purchase securities in the United States, Australia, Canada, Japan or South Africa. Any new ordinary shares to be issued in connection with the proposed capital raising have not been and will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered in the United States absent registration or an exemption from the registration requirements of the Securities Act. There will be no public offer of the new ordinary shares to be issued in connection with the proposed capital raising in the United States.

Neither the content of the JJB corporate website nor any website accessible by hyperlinks on the JJB corporate website is incorporated in, or forms part of, this announcement.

Forward looking statements

Certain statements made in this announcement constitute forward-looking statements. Forward looking statements can be identified by the use of words such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "plan", "seek", "target", "continue" or similar expressions and relate to, among other things, the performance of the business of JJB in the near to medium term, the business strategy of JJB and its plans and objectives for future operations, including those set out in the revised business plan. Such statements are based on current expectations and, by their nature, are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or performance, expressed or implied, by the forward-looking statement. Factors that might cause forward looking statements to differ materially from actual results, include among other things, general economic conditions in the United Kingdom. These forward-looking statements speak only as of the date of this announcement. The information and opinions contained in this announcement are subject to change without notice and, subject to compliance with applicable law, JJB assumes no responsibility or obligation to update publicly or review any of the forward-looking statements.

Unaudited financial results, potential cost savings and targeted sale and margin progression

References in this announcement to FY11, FY12 and FY13 etc are to the 52 week period ended or ending in January 2011, 2012 and 2013 etc respectively and references to financial results for FY11 are to the unaudited results for FY11 extracted without material adjustment from unaudited management information relating to the Group. The Company intends to publish its audited results for FY11 in May 2011.

Potential cost savings have been calculated on the basis of JJB's existing cost and operating structure. The achievability of such savings and estimated costs of achieving such savings relate to future actions and circumstances which, by their nature, involve risks, uncertainties and other factors. As a result, the potential cost savings referred to in this announcement may not be achieved, or the savings achieved could be materially different from those estimated.

The statements relating to targeted sales and margin progression relate to future actions and circumstances, which, by their nature, involve risks, uncertainties and other factors. As a result, the targeted sales and margin progression referred to in this announcement may not be achieved, or the progression achieved could be materially different from that estimated.

None of the unaudited results for FY11, the potential cost savings or the statements related to targeted sales and margin progression constitute or are intended to constitute a profit estimate or profit forecast and should not be interpreted to mean that actual earnings for FY11 or prospective earnings for FY12 and/or any subsequent financial years would necessarily match or be greater than those reported for FY10 or for any preceding financial year.