Blacks in third profit alert

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The Independent Online

Blacks Leisure became the latest festive casualty yesterday, capping a disastrous 2006 with its third profit warning since the summer.

Profits at the camping specialist, which is being stalked by the Sportsworld owner Mike Ashley, will be all but wiped out by a collapse in sales at its Millets chain, it admitted.

The retailer added global warming to its litany of excuses for its dire performance. Others have ranged from Glastonbury's omission from last year's festival calendar to the summer's drought, which killed demand for waterproofs.

A muggy November and December was the last straw for Millets, which relies on British families stocking up on cheap but warm outdoor gear. Underlying sales at Millets and Blacks fell 6 per cent in the five weeks to 30 December, although Millets bore the brunt of the pain.

Its broker, Dresdner Kleinwort, cut its pre-tax profit forecast to £1.1m from £12.5m. At the start of the year the City had pencilled in profits of more than £20m. Russell Hardy, the chief executive, said the group would adjust its ranges to cope with the shift in climate. He wants to overhaul Millets' image to make it popular with students and festival-goers. "The whole tone of the brand will be retro chic, starting with a Summer of Love initiative in the spring," he said.

Despite spending some £50m on building up a near 30 per cent stake in Blacks Leisure, Mr Hardy said Mr Ashley had not asked for a meeting. Bid speculation halted the slide in the group's shares, which closed at 363p, to 9 per cent, analysts said.