Some 2,200 staff at JJB Sports were made redundant today after administrator KPMG closed 133 stores and sold the remaining 20 to rival Sports Direct International.
Wigan-based JJB Sports was badly affected by the economic slowdown and found it difficult to compete with Sports Direct whose parent company, Sports World bought the stores, the brand and its website.
The deal is worth £23.8 million and will protect 550 jobs in the UK, including its warehouse.
But the agreement is a worse-than-expected outcome for JJB staff as Sports Direct was reportedly hoping to safeguard up to 1,500 jobs and buy up to 60 stores.
JJB said in a statement: “Sports Direct will acquire 20 stores, substantially all of the stock in the business and the Slazenger Golf brand licences, as well as the company’s freehold property in Wigan.
"The remaining stores will not form part of the sale and the administrators do not intend to trade from these stores in the administration.
“The net proceeds of the sale will be used to repay the company’s outstanding debt to its lender and other secured creditors.'
David McCorquodale, corporate finance partner at KPMG, who led the sales process, said the level of cash and further operational restructuring required to rescue a more substantial part of the business was too much risk for most interested parties.
He added: "All staff made redundant as a result of store closures have had their arrears of wages and holiday entitlements paid in full.
"Our team of employment specialists will be supporting staff on completing redundancy forms and putting them in touch with job seeker services.
"We will now be reviewing what options are available for the remainder of the business, such as selling leasehold interests."
JJB said in a statement: “Sports Direct will acquire 20 stores, substantially all of the stock in the business and the Slazenger Golf brand licences, as well as the company’s freehold property in Wigan.
"The remaining stores will not form part of the sale and the administrators do not intend to trade from these stores in the administration.
“The net proceeds of the sale will be used to repay the company’s outstanding debt to its lender and other secured creditors.'
JJB's collapse will serve as another blow to the high street after recent high-profile casualties including video games retailer Game Group, fashion chain Peacocks, outdoor specialist Blacks Leisure and Clinton Cards.
The JJB name will vanish from the high street as Sports Direct intends to convert all stores as part of the deal.
The group had already warned investors - who include the Bill and Melinda Gates Foundation - that they were likely to see their stakes lost under any rescue deal.
Brian Green, David Costley-Wood and Richard Fleming, partners of KPMG LLP, were appointed as administrators of the company.
Fleming, UK head of restructuring at KPMG, said it was unfortunate that a buyer could only be found for 20 stores.
JJB put itself up for sale at the end of last month after failing to secure the funds needed to overhaul its stores.
JJB secured its most recent lifeline four months ago when it landed £20 million from US retailer Dick's Sporting Goods and a further £10 million from existing shareholders.
The group earmarked £20 million of the most recent funding on converting 60 of its most important stores in 2012 and 2013 into a new format which during trials produced much-improved sales and margins.
More dire trading despite the UK's summer of sport left the stricken firm asking shareholders for another cash injection, but this time they ran out of patience, finally forcing the group to throw in the towel and put itself up for sale.