Blacks ventures pounds 50.8m on purchase of Millets chain
Saturday 13 November 1999
Outdoor acquired Millets from Sears in 1996 for pounds 14m through a management buy-in. Roy Crosland, Outdoor's chief executive who led the buy-in, will have responsibility in the enlarged group for its outdoor range, comprising Blacks Outdoor stores along with Millets, Air and Free Spirit, currently in The Outdoor Group. Mr Crosland will make pounds 3.5m in respect of his Outdoor shares.
Simon Bentley, Blacks' chairman and chief executive, said: "It's been successfully repositioned into a quality mainstream player. Outdoor's management have done a great job." The deal will add Outdoor's 216 outdoor retail stores to Blacks' existing chain of 221 outlets across the UK
Mr Bentley said the enlarged group would be reorganised into two divisions, including one for the 43 Blacks Outdoor stores and the three Outdoor Group chains. The second division will concentrate on Blacks' existing sports and fashion chains - 156 First Sport and 22 Active Venture shops.Tom Knight, who currently manages Blacks Outdoor, willbecome deputy chairman. He will continue to manage the group's sports retail division.
Blacks is paying pounds 50.8m, made up of 6.6 million shares and pounds 28.8m in cash funded by a new pounds 71.5m overdraft from Bank of Scotland. Outdoor, which comes with pounds 6m in debt, had sales of pounds 81m and operating profits of pounds 6.4m last year. Mr Bentley said the price was sensible for both parties.
Blacks will have 16 per cent of the market, compared to the 4 per cent of its nearest rival, Army Surplus Stores. It expects to reap scale economies from centralising purchasing and combining own brands.
Mr Bentley said few, if any, jobs would be lost as he planned around 15 new openings a year. The present retailing environment was difficult, however, because mild weather had dampened demand. "We need it to be cold," he said.
Nick Bubb, retail analyst at SG Securities, said: "It's a great price for Blacks. Outdoor were clearly in a bit of a corner. There are lots of synergy benefits and it's earnings enhancing. But it will be a big change for Roy Crosland, moving from running a business to reporting to someone."
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