Wires

Norwegian retailer XXL plans "massive" clearance sale

OSLO, Feb 7 (Reuters) - XXL, the Nordic region's largest sports retailer, is at risk of breaching loan covenants and plans a "massive clearance campaign" to rid itself of unsold goods after failing to meet profit expectations, it said on Friday.

The group's revenue fell by 5% last year and was down 22% year-on-year in January amid mild weather that discouraged customers from buying items such as skis and other products normally sold during winter.

The company has repeatedly warned of weaker sales, and earlier this week Norwegian competitor Gresvig filed for bankruptcy.

"XXL will immediately launch a massive clearance campaign in (its) main markets for the benefit of all our customers," the company said in a statement.

"There is a risk for XXL not being in compliance with (loan) covenants by the end of Q1 ... XXL investigates different alternatives for long term sustainable sources of funding for the company," it added. (Reporting by Terje Solsvik, editing by Gwladys Fouche)