JJB Sports last week posted a loss in annual profits of 45 percent. The price war on the high street was the cause of the slump. The sportswear chain said that decreasing sales and major discounting has caused operating profits to drop to £34.3 million from £62.1 million the year before. The results were in line with analysts' expectations, after JJB has issued a series of profit warnings. Fierce competition from Sports World International and JD sports, as well as from supermarkets looking for a piece of the sports and leisurewear pie, proved too much for JJB.

Earlier this month Britain's biggest sportswear provider Sports World International reported an annual sales rise of 45 percent, with revenues of £905 million. JJB reported revenues of £745.2 million, a drop of 3.6 percent, with like-for-likes sales down 4.3 percent. The company said that trading in 2006 was in line with expectations. Like-for-like sales were up 2.6 percent, although gross margins fell to 46.1 percent from 49 percent due to aggressive pricing.

JJB is increasingly looking to invest in health clubs and out-of-town stores to boost growth. "Although not unexpected, the fall in the full-year profits is disappointing," said non-executive chairman Roger Lane-Smith.