JJB Sports secured a stay of execution from its bankers on Wednesday, despite announcing an 8.9 per cent drop in sales.

It was due to repay a £20 million bridging facility from Kaupthing, the Icelandic bank, this Sunday, but its banks, which also include Barclays and HBOS, decided to allow JJB to pay the £20 million pro-rata to all three lenders instead.

The sportswear retailer has a £60 million facility with Barclays and a £15 million facility with HBOS, as well as the Kaupthing bridging loan. JJB would not say what funds it has drawn from Barclays and HBOS.

JJB, which HBOS said had breached its covenants in September, is holding a single set of negotiations with its banks, rather than separate discussions. Wednesday's trading statement was held up for nearly four hours, because of an “administrative delay” beyond JJB's control, the company said. There was speculation that it was related to the negotiations.

JJB has appointed Lazards, the investment bank, to advise on a sale of its lifestyle business, including Original Shoe Company and its gyms. It is being advised by KPMG on debt negotiations. Like-for-like retail sales, excluding the shoe and healthclub divisions, were down 8.9 per cent in the period from July 28 to December 7. JJB said that the outlook remained uncertain but it was trading strongly in volume terms after starting its sale early, two weeks ago.

In a briefing on Wednesday morning, Chris Ronnie, JJB's chief executive, was reluctant to issue guidance, even on what exactly was included in the like-for-like sales figures, analysts said.

David Stoddart, at Altium Securities, said: “We don't know what the sales are, we don't know what the margins are and therefore what gross profits are, and they're saying they're keeping a close watch on costs, which they always do. I just wonder why you would be so circumspect.”

JJB's shares went into freefall in September, when it admitted that HBOS had accused it of breaching its banking covenants. The disclosure forced its auditors to issue a going-concern warning over the company's future. The shares fell ¾p or 7 per cent, to 10¼p yesterday, down 92 per cent from their year-high.

Last week JJB sold four stores to Sports Direct, the retailer controlled by Mike Ashley, raising £3.4 million cash. JD Sports Fashion and Mr Ashley both hold stakes in JJB, which has been at the centre of takeover talk.

JJB made a pre-tax loss of £9.7 million for the six months to July 27, at which point its net debt stood at £57.6 million.

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