Chris Ronnie is likely to be ousted as chief executive of JJB Sports within days after the leisurewear retailer revealed it has suffered an awful Christmas.

Ronnie, already reeling from a share scandal, now seems certain to leave once the investigation into the controversy is completed by lawyers Herbert Smith.

The group today revealed that it will plunge into the red, making a loss of up to £10 million for the year to 25 January.

Sales dropped by 8% in the past five weeks.
Retail knight Sir David Jones, credited with turning around Next, was promoted to executive chairman two weeks ago. Peter Williams, formerly of Selfridges, has also arrived on the board.

Both would seem to have their work cut out to save the company, something even Sir David admits. He says: “We have started a comprehensive review of the business, including product offer, store layout and operating systems.

“This is an essential part of the plan to re-establish JJB as a major force in the sportswear market. We are under no illusions that this is a very difficult task,” he added.

The health clubs, where sales were up 8%, are being sold to raise cash.

After asking for clarity on who precisely owns JJB, Jones discovered that the 27.5% stake in the company that he thought was held by Ronnie is actually owned by the liquidators of collapsed Icelandic bank Kaupthing. Ronnie claims not to know when this transfer happened.

A close friend of rival sports-fashion guru Mike Ashley, Ronnie's position is now said to be untenable.

The JJB stake cost Ronnie £190 million. Where he got the money from remains a mystery.

Ashley owns 11% of JJB and if the company closes it will remove a major competitor.

Citigroup says JJB shares are worth 1p at best.

Analyst Ben Spruntulis says: “Since September JJB has reportedly breached banking covenants, borrowed and not fully repaid a bridging loan from Kaupthing, received a qualified audit report and cut the dividend to zero.”

The stock lost 21/4p to 111/2p.