Sir David Jones, the embattled executive chairman of JJB, will step back from running the troubled sports retailer.

The veteran retailer, who took a controversial £1.5 million personal loan from rival Mike Ashley without telling shareholders, will go part-time as soon as a new chief executive can be found, JJB said today.

The sports retailer, which said that sales at its stores have fallen by more than 40 per cent, said that it has begun the search for a new chief executive to replace Sir David, who has Parkinson’s disease.

Two other non-executive directors, Roger Lane Smith, the former chairman and David Beever, the company’s long-standing senior independent director also stepped down today.

John Clare, the former chief executive of DSG International, the owner of Currys and Dixons, will also to join the board, it was announced.

Mr Clare said: “I look forward to working with Sir David Jones and his management team. This is a company with a successful past , but even more successful times ahead of it.”

Sir David, renowned as the saviour of Next in the early 1990s, has been locked in a row about the details of a £1.5 million personal loan he received from Mike Ashley, the Sports Direct and Newcastle United owner, which has sparked accusations over possible conflicts of interest. As well as being JJB's major competitor, Sports Direct had a trading relationship with the struggling Wigan company.

Sir David said at JJB's annual meeting in Wigan today: “In hindsight I wished I had not made that contract. It happened. In no way has that loan compromised my position as executive chairman.”

He added: “Since I became executive chairman the amount of business that is conducted with Sports Direct has completely stopped. I am totally convinced that there has been no conflict of interest.”

Sir David received full backing from the board of directors at the meeting and was also re-appointed to the board by 98 per cent of shareholders.

He had been expected to be asked questions by a representative sent by Mr Ashley about the loan. However, the representative, Chris Emerson, avoided the topic and concentrated on issues relating to stock levels.

Sir David said that the company would revert to concentrating on building its own internal brands and stocking specialist suppliers such as Adidas and Nike, rather than mass market brands.

“The recovery of profitability will not occur in this year mainly because of shortage of stock,” he said. “The company does not anticipate any significant improvement of sales until the fourth quarter of 2009.”

The veteran retailer blamed its poor trading performance on low stock levels, but said it did not expect any improvement in sales until the fourth quarter.

Revenue for the 25 weeks to 19 July was down by 40.4 per cent on last year; like-for-like sales were down 26.5 per cent in the same period.

Times Recommends

• Toyota recalls 437,000 cars including Lexus
• Myners says bonuses are bleeding pension funds
• Japanese company faked safety reports on seats