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.

PROMOTED VIDEO
Arts and Entertainment
booksPhotographer Richard Young has been snapping celebrities at play for 40 years - but he says it wasn’t all fun and games...
News
i100
Sport
Aguero - who single-handedly has kept City's Champions League dreams alive - celebrates his dramatic late winner
footballManchester City 3 Bayern Munich 2: Argentine's late hat-rick sees home side snatch vital victory
News
Muhammad Ali pictured in better health in 2006
peopleBut he has enjoyed publicity from his alleged near-death experience
Arts and Entertainment
Tony breaks into Ian Garrett's yacht and makes a shocking discovery
TVReview: Revelations continue to make this drama a tough watch
News
news
News
ebooksNow available in paperback
News
peopleSinger tells The Independent what life is like in rehab in an exclusive video interview
News
The assumption that women are not as competent in leadership positions as men are leads to increased stress in the workplace
science... and it's down to gender stereotypes
Arts and Entertainment
Inner sanctum: Tove Jansson and friends in her studio in 1992
booksWhat was the inspiration for Finland's most famous family?
News
i100
Arts and Entertainment
Singer songwriter Bob Dylan performs on stage
films
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

Citifocus Ltd: Product Development - Asset Management

£Attractive: Citifocus Ltd: High calibre individual with significant product d...

Citifocus Ltd: Credit Ratings - Banking Sector

£Negotiable: Citifocus Ltd: Leading global bank seeks experienced credit analy...

Citifocus Ltd: Economic Crime Investigation & Analysis

£Attractive Package: Citifocus Ltd: High calibre individual with a high degree...

Citifocus Ltd: Snr Risk Analyst - Capital & Liquidity

£Attractive: Citifocus Ltd: High calibre individual with superior academics an...

Day In a Page

Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?
Nightclubbing with Richard Young: The story behind his latest book of celebrity photographs

24-Hour party person

Photographer Richard Young has been snapping celebrities at play for 40 years. As his latest book is released, he reveals that it wasn’t all fun and games
Michelle Obama's school dinners: America’s children have a message for the First Lady

A taste for rebellion

US children have started an online protest against Michelle Obama’s drive for healthy school meals by posting photos of their lunches
Colouring books for adults: How the French are going crazy for Crayolas

Colouring books for adults

How the French are going crazy for Crayolas
Jack Thorne's play 'Hope': What would you do as a local politician faced with an impossible choice of cuts?

What would you do as a local politician faced with an impossible choice of cuts?

Playwright Jack Thorne's latest work 'Hope' poses the question to audiences
Ed Harcourt on Romeo Beckham and life as a court composer at Burberry

Call me Ed Mozart

Paloma Faith, Lana del Ray... Romeo Beckham. Ed Harcourt has proved that he can write for them all. But it took a personal crisis to turn him from indie star to writer-for-hire
10 best stocking fillers for foodies

Festive treats: 10 best stocking fillers for foodies

From boozy milk to wasabi, give the food-lover in your life some extra-special, unusual treats to wake up to on Christmas morning
Phil Hughes head injury: He had one weakness – it has come back to haunt him

Phil Hughes had one weakness – it has come back to haunt him

Prolific opener had world at his feet until Harmison and Flintoff bounced him
'I have an age of attraction that starts as low as four': How do you deal with a paedophile who has never committed a crime?

'I am a paedophile'

Is our approach to sex offenders helping to create more victims?
How bad do you have to be to lose a Home Office contract?

How bad do you have to be to lose a Home Office contract?

Serco given Yarl’s Wood immigration contract despite ‘vast failings’
Green Party on the march in Bristol: From a lost deposit to victory

From a lost deposit to victory

Green Party on the march in Bristol
Putting the grot right into Santa's grotto

Winter blunderlands

Putting the grot into grotto
'It just came to us, why not do it naked?' London's first nude free runner captured in breathtaking images across capital

'It just came to us, why not do it naked?'

London's first nude free runner captured in breathtaking images across capital