Stakebuilding at Blacks fuels bid speculation

Speculation over an imminent bid for the camping retailer Blacks Leisure intensified yesterday, after Sportsworld International, the owner of London's Lilywhite's sports department store, snapped up a 29.38 per cent stake in the business.

Sportsworld, run by the entrepreneur Mike Ashley, has been linked with a bid for Blacks in the past, but refused to comment on its intentions yesterday.

The news came as Blacks published an expected fall in like-for-like first half sales, after a poor summer. The group issued a profits warning in August, blaming the hot weather and World Cup for poor trading. It also said the absence of a Glastonbury festival this year had hit tent sales.

The group conceded that sales had continued to deteriorate since the end of its first half, down 2.3 per cent over the eight weeks to 21 October, compared with the same period last year. The chairman, David Bernstein, blamed the continued poor trading on the dry weather conditions in September. The group is hoping that the current wetter weather conditions continue, as this tends to drive the retailer's sales.

In spite of the poor start to the second half, Mr Bernstein said profit margins had held up, adding that he believed the group could still meet its forecasts for the period if the company has a good Christmas and if weather conditions move in its favour.

Profit before tax for the first half was just £100,000 compared with £6.9m in the same period last year. However, the group said it had invested heavily in the business during the period, particularly in the company's online proposition, and hoped this investment would now begin to pay off.

"Our sales in the first half were affected by a tough retail environment with the added impact of the World Cup in June and the hot, dry weather," Mr Bernstein said. "Sales of camping products were weak during the period and we face strengthened competition in this sector. Millets has been particularly affected by these factors, while the performance of Blacks has been more resilient. Our broadwear businesses, Freespirit and O'Neill, both performed satisfactorily."

Shares in Blacks rose as much as 5 per cent yesterday afternoon, before closing down 1p at 442p, giving the company a market value of £444m.