JJB Jjb Sports

U.K. sports retailer JJB Sports PLC (JJB.LN) said Thursday it has reached agreement on a strategic investment package for up to GBP30 million with a number of its leading investors and Dick's Sporting Goods, Inc. (DKS), and agreed a financing package with adidas AG (ADS.XE), a key supplier partner, and Bank of Scotland.

MAIN FACTS:

-Dick's to invest an initial GBP20 million in new shares and convertible loan notes, with the right to invest a further GBP20 million in convertible loan notes

-Opportunity for JJB to draw on Dick's experience in the sports retail market, with at least one representative of Dick's expected to join JJB board

-IAML, Harris Associates, Crystal Amber and BMGFT to invest an additional GBP10 million by exercising existing warrants and subscribing for new shares

-adidas Group to provide security for a two-stage loan of up to GBP15 million to assist in the Group's store transformation program

-Additional funding to accelerate store transformation program ahead of the UEFA Euro Championships and the London 2012 Olympics, following strong performance of transformed store format

-Bank of Scotland to extend existing facility arrangements until May 2015

-Group has successfully implemented the first phase of the CVA with 41 of the 43 stores identified for closure on or before April 24 now closed, of which 11 have been surrendered to the landlords, generating an annualized rent saving of GBP1.6 million.

-For the remaining two stores that were identified as first period compromised leases, rents continue to be paid on a reduced basis of 50% of the contractual liability--plus 5% dilapidations and any contractual amount for service charges--until April 24, 2012.

-For the additional 46 stores identified for closure on or before April 24, 2013 13 stores have been surrendered to the landlords as at April 1, generating an annualized rent saving of GBP1.8 million and one store has returned to the core estate.

-For the remaining 32 stores that were identified as second period compromised leases, rents continue to be paid on a reduced basis of 50% of the contractual liability--plus 5% dilapidations and any contractual amount for service charges--and will continue to be paid until April 24, 2013.

-As at April 1, 2012, management has also achieved annualized rates savings of GBP2.9 million.

-Management estimate savings of GBP4.1 million in negative contribution and a further incremental saving in working capital.

-Management has secured significant cost savings across all key business functions.

-Management intend to accelerate the refurbishment program in a number of stores.

-Plan is to transform 25 stores before the end of October and then a further 35 stores in 2013 in a manner consistent with the concepts displayed in Broughton Park, Chester.

-Capital cost per store is planned at GBP30 per square foot, bringing the total cost of this transformation program over the next two years to over GBP20 million.

-Shares at 0700 GMT unchanged at 16.25 pence valuing the company at GBP47.66 million.

-By Ian Walker, Dow Jones Newswires; 44-20-7842-9296; ian.walker@dowjones.com

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