Blacks to raise £20m as cold snap heats up sales

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Blacks Leisure, the operator of the Millets and Blacks fascias, is considering a £20m fundraising to spruce up and expand its store estate, after posting soaring Christmas sales helped by the recent snow and icy weather.

Neil Gillis, the chief executive of the retail group, which has more than 300 outlets, said the potential equity raising of between £15m and £20m – depending on investor demand – would largely be used to refurbish its shops. "A quarter of the stores in this company had no investment for 10 years, and this is one of the reasons it had failed and had sunk into loss- making," he said.

Blacks completed a company voluntary arrangement, an insolvency procedure, in November to ditch 87 unprofitable stores and avoid collapse. The fundraising would also allow it to cancel its higher-interest seasonal peak bank facility of £7.5m, as well as rolling out its new store formats and selectively opening new shops, primarily smaller sites in the same towns and cities it exited as part of the restructuring last year.

Excluding closed stores, Blacks delivered sparkling underlying sales, up 15.2 per cent for the six weeks to 7 January, boosted by sales of weather-resistant gear during the cold snap. "We are not looking for a thaw anytime soon," said Mr Gillis. But he pointed out that the group's like-for-like sales are also up 12 per cent for the period between 29 August and 7 January. Blacks now operates just 13 of its Freespirit fascias.