Ailing retailer JJB Sports has suspended its chief executive pending an investigation into “certain matters”.
It emerged last week that JJB boss Chris Ronnie no longer owned his 27.5 per cent stake in the firm after it was seized by stricken Icelandic bank Kaupthing, now in administration.
Mr Ronnie had used the shares as security against loans from Kaupthing last year when he and Icelandic group Exista bought founder David Whelan’s stake.
JJB said last week that Mr Ronnie was unable to say when the shares were transferred. Kaupthing told the company that the stake was acquired during 2008 but has not confirmed the exact date of the transaction.
The company said in a statement that it had suspended Mr Ronnie from his duties “pending the outcome of an on-going investigation being conducted by its legal advisers into certain matters”.
The Mail on Sunday previously reported JJB’s bank Barclays ordered an investigation into Mr Ronnie’s activities, with recently-knighted new chairman and former Next boss Sir David Jones leading the review.
The Wigan-based retailer has been under pressure from tighter margins and lower sales. It has said that losses could reach £10 million this year and revealed that like-for-like sales across the group fell 6.8 per cent in the five weeks to January 11.
JJB is already “considering its options” for the struggling Lifestyle business, which includes the Qube and Original Shoe Company chains - the arm that is largely responsible for the current losses.
It has previously attempted to sell the division and was said to be meeting yesterday to decide its fate.
A closure of the division is also possible, with administration of the lifestyle arm not believed to have been ruled out.
JJB, which has about 400 stores, is also sending out details to potential buyers of its profitable chain of health clubs, leaving management to concentrate on improving the main sportswear chain.
Sir David, appointed as executive chairman this month, has taken on a tough job in leading the retailer. He is also joined in his efforts by newly director Peter Williams, the former chief executive of Selfridges, who started on January 5 to oversee strategy.