Doubts raised over future of Blacks after dire half-year results

Outdoor retail group's losses hit £16m, as new CEO unveils turnaround strategy

Julia Reynolds, the new chief executive of Blacks Leisure, yesterday revealed a turnaround plan for the troubled outdoor retail group. But she appears to have a mountain to climb after it posted dire half-year results and issued a "going concern" warning.

The group behind the Blacks and Millets chains saw its losses more than double to £16m and said it needs to refinance its banking facilities before 3 March. Blacks also said it requires additional funding to turn around its performance and is considering an emergency rights issue.

Its chairman Peter Williams, who has now been appointed permanently, said: "We are looking at all options and that [cash call] would be one of them. We want to get it sorted out by February."

However, its requirement to restructure its finances led Blacks to warn that a "material uncertainty exists that may cast significant doubt about the group's ability to continue as a going concern and therefore that it may be unable to realise its assets and discharge its liabilities in the normal course of business."

Blacks has been struggling for a number of years and narrowly avoided administration in late 2009 by implementing an insolvency procedure that enabled it to shed nearly 90 stores.

Asked about reports that Blacks could face administration if its performance does not improve, Mr Williams said: "That is not part of the plan."

However, its half-year results laid bare the depth of the challenge it faces. Over the 26 weeks to 27 August, Blacks' losses widened to £16m from £7m the year before, dragged down by falling sales and margins.

Freddie George, an analyst at Seymour Pierce, said the losses are "worse than expected". The group's gross margins – the difference between the price a retailer pays for a product and that which it sells it for – fell by 5.1 per cent to 43.7 per cent.

Mr George said: "New management now faces a severe challenge. Blacks Leisure is being impacted by the move for specialisation in the sports category and is being squeezed not only by the value players, including Sports Direct, which controls Karrimor and Field and Trek, but in addition the specialists such as Go Outdoors and Mountain Warehouse."

Since the end of August, Blacks said its trading performance had deteriorated and its sales had slumped by 14.2 per cent. This compares to the group's underlying sales falling by 7.2 per cent to £81.1m over the 26 weeks.

But Ms Reynolds, the former head of the online lingerie retailer Figleaves, has identified a "huge opportunity" to revive Blacks' fortunes, after conducting a comprehensive review of the business in her first 100 days.

She aims to strengthen Blacks' retail disciplines such as better buying, merchandising and stock management, and online offers. Ms Reynolds, who made her name as a fashion executive at Tesco, also wants to further develop the group's own-label ranges, particularly in Millets. This will help to improve its margins.

She said: "Some of the retail disciplines were missing in the business." For example, Ms Reynolds plans for Blacks to be able to change its stock four times a year by 2013, as opposed to just twice before she joined in August. Shares in Blacks closed down 0.4p, or 4 per cent, to 8.9p.

Speculation persists that Sports Direct, which owns 21 per cent of Blacks, may again try to acquire the group at a knockdown price. Ms Reynolds has invited Sports Direct for a meeting, but it has yet not responded.

News
Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
News
A scene from the video shows students mock rioting
newsSchool leaver's pic YouTube video features staging of a playground gun massacre
Travel
travel
Voices
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
PROMOTED VIDEO
Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
Sport
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
News
Morrissey pictured in 2013
people
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Travel
travel
News
Robyn Lawley
people
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
people
News
i100  ... he was into holy war way before it was on trend
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmThe film is surprisingly witty, but could do with taking itself more seriously, says Geoffrey Macnab
News
people
Life and Style
food + drinkVegetarians enjoy food as much as anyone else, writes Susan Elkin
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

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Day In a Page

Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star