JD Sports Fashion is expected to buy the troubled outdoor retailer Blacks Leisure on Monday after it enters administration.
The operator of 208 Millets and 98 Blacks stores is appointing the accountancy firm KPMG as administrator, but suitors are likely to snap up the brands and assets of the group as early as Monday, saving many of the chain's 3,500 jobs.
JD Sports is believed to have seen off three rival bidders. The sportswear retailer's biggest shareholder is Pentland, which owns the Berghaus outdoor brand that is sold in Blacks' shops. The unsuccessful bidders included the outdoor specialist's long-term suitor Sports Direct, headed by Newcastle United's owner Mike Ashley. The sports giant had been a 22.5 per cent shareholder in Blacks.
The pre-packaged administration, a controversial insolvency procedure, will allow the buyer to wipe out the Blacks' debts and ditch unprofitable stores. But the new owner is expected to close the chain's head office and warehouse in Northampton, which costs about £26m a year, including rent and staff wages.
The sale of the group's assets and brands is also almost certain to see a number of its 306 shops closed. However, Blacks is not yet in administration and all its shops remain open for trade. The outdoor group said shareholders will be wiped out, and suspended trading in its shares at 1.38p.
Blacks said it "expected that the process to commence the appointment of administrators of the company and certain of its subsidiaries will begin shortly", which is likely to take place just before the completion of a sale. The outdoor group anticipates completing a sale of "substantially all of the trade, assets and brands of the group within the next few days".
The insolvency practitioners at KPMG will also handle the administrations of Past Times, the retailer of retro-themed gifts, and La Senza, the lingerie chain.
Past Times, owned by Epic Private Equity, has told staff that 46 of its100 shops will close before the end of Tuesday. The formal insolvency of La Senza is also expected by then. La Senza, which employs 2,600, has already said it plans to close 81 of its 146 stores.
Triumph, the German maker of underwear, has held talks about acquiring a number of La Senza stores. But it faces competition from Limited Brands, which will launch its Victoria's Secret chain in the UK this year.
- More about:
- Brand Marketing
- Mike Ashley
- Newcastle United
- Stock And Equity Market And Stock Exchange