JJB Sports, the retailer, is offloading its Lifestyle division for £20m to a trade rival.

It is understood the deal will result in around one hundred Original Shoe Co and Qube stores being sold to an unnamed trade rival less than 12 months after JJB’s chief executive, Chris Ronnie, bought the outlets from Sports Direct and West Coast Capital.

JJB was involved in a nasty spat with its auditors Deloitte & Touche last month when the accountancy firm warned of material uncertainties that “cast significant doubt” on the chain’s ability to continue as a going concern.

The argument lead to speculation - consistently denied by JJB Sports – that it is in breach of its banking covenants and would have to be broken up and financially restructured.

A source close to the company said the lifestyle stores disposal was a business decision. “We had a really good offer for the stores that we couldn’t turn down,” said the source.

But JJB like many high street retailers has been hit hard by the consumer downturn. The sports chain is one of a number of companies, including stores owned by embattled Icelandic group and distressed takeover target Baugur, on which large credit insurers have withdrawn cover.

At the end of September JJB scrapped its interim dividend announcing adjusted pre-tax loss of £9.7m, compared with a profit of £8.3m last year.

A spokesman for JJB declined to comment on today's sale.

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