Rangers have insisted that they won’t lose out even though sponsors JJB Sports have been hit with financial problems. The club signed a £48m 10-year licensing agreement with the sportswear retailer three years ago. Rangers received £18m up front with £3m in royalties guaranteed each year, but yesterday the sportswear retailer called in KPMG to its loss-making fashion chain, Qube and Original Shoe Company.
Rangers have insisted that they won’t lose out even though sponsors JJB Sports have been hit with financial problems. The club signed a £48m 10-year licensing agreement with the sportswear retailer three years ago. Rangers received £18m up front with £3m in royalties guaranteed each year, but yesterday the sportswear retailer called in KPMG to its loss-making fashion chain, Qube and Original Shoe Company. The appointment of KPMG emerged as JJB continues talks with its bankers about securing a ‘standstill’ on its debt. The company has until the end of this week to secure alternative finance under the two-month standstill agreement struck in December. According to reports if JJB’s banks are not satisfied by Saturday at the latest, the rest of the business will be forced to file for administration.
Rangers issued a statement saying, ‘We have been given assurances in recent weeks that satisfied Rangers FC in that the realignment of JJB’s lifestyle division will not impact on the current trading arrangements with the club.’ This rather convoluted wording does not address the possible consequences which could result from further financial trouble for JJB. In those circumstances, it is likely that Rangers, who have already raked in £27m from the deal, would take back outright ownership of the merchandising license. They would again be responsible for getting their strips and merchandise out to their public and although their own shops have gone they would find outlets pretty quickly. Many supporters felt that the club’s right to market their brand shouldn’t have been sold off in the first place.