Who would want to be in Chris Ronnie's trainers right now?

Back in July at its AGM JJB Sports was being questioned on whether it would continue to pay its dividend, it decided to do so.

But this was the least of its financial problems as it is now fighting fires on a host of fronts. It has been in an ongoing disagreement with its banker HBOS over whether it breached its banking covenants, credit insurer Coface has refused to provide cover for JJB's suppliers, there is concern over what will happen to the 15 per cent stake held in JJB by Icelandic investment group Exista.

This little package sits atop a group that has been delivering deteriorating trading. It recently disclosed interim figures for the 26 weeks to July 27 that showed a decrease in sales at its retail operations of seven per cent and on a like-for-like basis it suffered a fall of 4.2 per cent.

What is worrying is that the declines have been accelerating as the full 34 weeks to September 21 showed a fall in like-for-like sales in its retail division of 5.6 per cent. This led Landsbanki (which has its own troubles back in Iceland) to forecast a full-year decline of six per cent across the whole group in a note issued after the interims.

It also moved its recommendation on the company from 'Hold' to 'Reduce' with a target price of 35p, which compared with an underlying share price at the time of 44.5p. This would now look pretty racy in comparison to where we now find the shares languishing.

Over the past few days they have experienced daily falls of 10 per cent, 13 per cent, 26 per cent, 29 per cent and today (October 8) they are down another 30-plus per cent. This leaves it trading at the sub-12p level, which is a serious fall when you consider that it was at 118.75p exactly a month ago and enjoyed a high for the year of 174.75p.

What had given investors a bit of hope and provided some support to the shares was the possibility that chief executive Chris Ronnie and his supporters at Exista could take the business private. But with this now looking out of the question the floor has effectively been removed from the shares.

All investors are now left with is a poorly performing company in a deadly market with little cash to play around with. The options for the group look decidedly limited. Its weakened position must put into doubt the plans it had to accelerate the fit-outs at certain of its stores that had been strengthening its trading performance.

One plan that might be bolstered is the store closure programme. During the first half of the year JJB closed 96 outlets (compared with a mere six openings) as a result of their inability to contribute anything to group profitability. During the second half of the year it will not be a surprise to see further units added to the closure candidates list.

A radical pruning of the estate will be no bad thing and is likely to be a trend that will be seen increasingly frequently across the sector. The obvious downside to such action is the limited takers out there in the retail property market.

It is the same story with JJB's shares where there are clearly far too few buyers in the market. This is without doubt one hot stock at the moment but only in the sense that its temperature makes it far too uncomfortable for anybody to handle right now.

glynnd@theretailbulletin.com