Blacks set for cash call as sales melt away

Announcement triggers 11.4 per cent share price slump to new low of 3.88p

Blacks Leisure's chairman insisted yesterday that the troubled retailer could ride out grim Christmas trading after it warned annual profits would disappoint and that it needed more money to turn the business round.

The company said that falling consumer spending and confidence had hit trading since its interim results last month and said that its crucial Christmas trading period would miss expectations.

Peter Williams, the former Selfridges boss who joined Blacks as chairman in August, said the group was experiencing probably the worst retail environment he had ever seen.

"I've been through similar situations at other Christmases and normally what happens is, quite close to Christmas, people decide to have a good time and they start spending But the reality is you never recover what you have lost. It's an important trading period but it's not make or break," he said.

The group, which operates under the Blacks and Millets brands, said it needed extra funding to put its plans into place and that it would go to its shareholders first.

The company is also in talks with Bank of Scotland, part of Lloyds Banking Group, about refinancing its lending agreement ahead of the financial year-end in February. Mr Williams said he believed the bank would continue to support the company if it could raise some fresh finance to turn itself round. Blacks' already battered shares plunged on yesterday's news, dropping more than 60 per cent before closing down 11.4 per cent at a new end-of-day low of 3.88p.

The fall valued the retailer's equity at just £3.3m.

Mr Williams blamed unseasonably warm weather, falling disposable incomes and gloomy economic news for Blacks' poor sales.

Tour operator Thomas Cook also warned of dire trading earlier this week.

However, analysts at Charles Stanley said Blacks had been in long-term decline and there were questions over whether it could be revived. "We now see virtually no scope for the group's return to profitability," they said.

Mr Williams said shopping in Blacks' stores, and particularly in Millets, was "not a great shopping experience". Under its new chief executive, Julia Reynolds, Blacks wants to revamp the stores but it will need shareholders to put their hands in their pockets.

The company is 21 per cent owned by Sports Direct, which is controlled by Newcastle United's owner Mike Ashley. Blacks' relationship with Mr Ashley has been fraught and he refused to back a rights issue in May last year.

Mr Williams said Ms Reynolds met Mr Ashley last week and the meeting was "very constructive". Asked whether Mr Ashley was likely to stump up the necessary cash in an equity raising, Mr Williams said: "I would obviously hope so, but it's their decision."

Suggested Topics
News
people

Actress sees off speculation about her appearance in an amazing way

Arts and Entertainment
Serge Pizzorno of Kasabian and Noel Fielding backstage at the Teenage Cancer Trust concerts
musicKasabian and Noel Fielding attack 'boring' musicians
News
peopleLynda Bellingham's tragic final Loose Women appearance moves audience to tears
Arts and Entertainment
'Right Here' singer Jess Glynne is nominated for Best Newcomer at the MOBO Awards 2014
musicExclusive: Jess Glynne hits out at 'ridiculous' criticism of white artists nominated for Mobo Awards
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Separated at birth? Frank Sivero (left) claims The Simpsons based Mafia character Louie on his Goodfellas character
arts + entsFrank Sivero sues Simpsons studio over allegedly basing mobster character on Frank Carbone
News
Carl Bernstein (left) and Bob Woodward (right) with former 'Washington Post' executive editor Ben Bradlee
people

The Washington Post editor helped Bob Woodward and Carl Bernstein bring down President Nixon

News
news

Voices
Stephanie first after her public appearance as a woman at Rad Fest 2014
voices

Arts and Entertainment
Laura Wood, winner of the Montegrappa Scholastic Prize for New Children’s Writing
books

Children's bookseller wins The Independent's new author search

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Lonely Planet’s Best in Travel 2015

UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London