Blacks owner JD Sports Fashion plots further closures
JD Sports Fashion warned it will shut more Blacks Leisure stores today after the chain it rescued from administration contributed to a sharp fall in profits.
The Bury-based group, which bought the business for £20 million in January, has already closed 93 of the worst performing stores but a further 50 are still under threat as it looks for a long-term estate of 150 sites.
It will also ditch the Millets name as JD plans to use Blacks, which sells own-brands such as Peter Storm and Eurohike, as its single outdoor fascia.
As expected, Blacks recorded a £10 million loss in the six months to July 28, helping to cut JD's profits to £2.9 million from £20.1 million a year ago.
However, with the business now stabilised it hopes Blacks will break-even in the second half.
JD said it had inherited a business with a severe lack of stock in many core lines as well as an excessively large and overrented store portfolio.
While the company sees a profitable future for the business, it warned that margins in the second half will come under pressure as a result of the need to clear camping products following the wet summer.
Today's profits reduction at JD was also driven by the cost of transferring to a new centralised warehouse at Rochdale, which is now fully operational.
JD's sports fascias of JD and Size? grew UK and Ireland like-for-like sales by 1.2% in a "robust" half-year performance, although operating profits for the division were £1.3 million lower at £18.9 million.
The 350 sports stores recorded growth of 3.2% in the UK and Ireland in the first six weeks of the second half but fashion brands, which include Bank and Scotts, saw a 6% fall in underlying sales over the same period.
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