JD Sports Fashion has indicated privately that it is considering a bid for the rival JJB Sports.

JJB and JD, which both sell fashion sportswear, declined to comment, but it is understood that JD’s management requested a meeting through a third party — believed to be Investec, its investment banking adviser — with Chris Ronnie, JJB’s chief executive, earlier this week to discuss JD’s stakebuilding in its rival.

JD said this week that it had bought 10.2 per cent of JJB, paying £8.1 million in a move widely interpreted as an attempt to gain a seat at the table should JJB be put up for sale.

Sources close to JD said that Brian Small, the retailer’s finance director, met Mr Ronnie and Roger Lane Smith, his chairman, yesterday morning. Asked whether he was considering a bid for JJB, Mr Small said that JD was considering all its options.

JJB is in separate talks to sell its 50-site gym chain to Dave Whelan, the owner of Wigan Athletic and the company’s founder, for about

£100 million. HBOS and Barclays, the retailer’s lending banks, appointed a restructuring team from KPMG to carry out a financial review of JJB this autumn. JJB needs the proceeds from a sale of its gym chain to reduce its bank debt and satisfy its lenders; the deal could cancel out the retailer’s debt.

Barclays is also a lender to JD and sources close to the situation speculated that the bank is encouraging a bid by JD for JJB. Barclays declined to comment, but a source close to it said JD was not being actively encouraged to bid for its rival. The source added that consolidation in the sector made sense, particularly for JJB, which he saw as the weaker of the two businesses.

JJB made an operating loss of about £8.4 million for the six months to July, while JD Sports is profit-making.

There is a complex web of cross-shareholdings between businesses that operate in the sportswear retailing sector. Sports Direct, the listed retail chain controlled by Mike Ashley, owns large stakes in JJB, JD and Blacks Leisure.

A banker close to the situation said that if JD believed Mr Ashley wanted to increase his stake in JJB, the retailer would bid for its rival. Mr Ronnie is also a former lieutenant of Mr Ashley, with whom he worked for many years before buying a stake in JJB. Sports Direct holds 21 per cent of JJB.

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