JJB Sports is closing the bulk of its stores with the loss of around 2,200 jobs, the latest British retailer to fall victim to a downturn in consumer spending after administrators found a buyer for only 20 of its shops.
Debt-laden JJB said on Monday administrators KPMG had sold 20 stores to British retailer Sports Direct, controlled by Newcastle United soccer club owner Mike Ashley, in a 23.77 million pound ($38 million) deal that would save 550 jobs.
However, despite high levels of initial interest in the Wigan-based firm, the remaining 133 stores would close on Monday, making 2,200 staff redundant, it added.
JJB has been battling falling sales and stiff competition from Sports Direct, its larger rival and an aggressive discounter.
The group becomes the latest high-profile retail failure in recession-hit Britain after outdoor goods company Blacks Leisure and discount fashion chain Peacocks went into administration - a form of protection from creditors - earlier this year.
The money raised will be used to repay its debt, JJB said, with shareholders not getting any return on their investment, as previously announced. JJB shares, which were valued at about 300 pence three years ago, were suspended at 0.4 pence.
KPMG said it would now review the options available for the rest of the business, such as selling the leasehold interests of some of the remaining stores.
The administrators said they had spoken with over 100 parties in the first few days of their appointment, with eight trade and private equity players tabling first round bids.
"Unfortunately the level of cash and further operational restructuring required to rescue a more substantial part of the business was too much risk for most interested parties," KPMG's David McCorquodale said in a statement.
JJB Sports was founded in 1971 by ex-Blackburn Rovers footballer Dave Whelan with a single store in Wigan, where the company is still headquartered.
In August the firm said it owed around 36 million pounds in total, around half in bank debt and the other half in convertible loan notes.
Sports Direct, which will also acquire nearly all the stock in the business and the Slazenger Golf brand licences, could pay up to a further 250,000 pounds after a post-sale stock take.
($1 = 0.6193 British pounds)
(Reporting by Neil Maidment; Editing by Mark Potter)