Blacks owner JD Sports Fashion plots further closures

JD Sports Fashion warned it will shut more Blacks Leisure stores (PA)

JD Sports Fashion warned it will shut more Blacks Leisure stores today after the chain it rescued from administration contributed to a sharp fall in profits.

The Bury-based group, which bought the business for £20 million in January, has already closed 93 of the worst performing stores but a further 50 are still under threat as it looks for a long-term estate of 150 sites.

It will also ditch the Millets name as JD plans to use Blacks, which sells own-brands such as Peter Storm and Eurohike, as its single outdoor fascia.

As expected, Blacks recorded a £10 million loss in the six months to July 28, helping to cut JD's profits to £2.9 million from £20.1 million a year ago.

However, with the business now stabilised it hopes Blacks will break-even in the second half.

JD said it had inherited a business with a severe lack of stock in many core lines as well as an excessively large and overrented store portfolio.

While the company sees a profitable future for the business, it warned that margins in the second half will come under pressure as a result of the need to clear camping products following the wet summer.

Today's profits reduction at JD was also driven by the cost of transferring to a new centralised warehouse at Rochdale, which is now fully operational.

JD's sports fascias of JD and Size? grew UK and Ireland like-for-like sales by 1.2% in a "robust" half-year performance, although operating profits for the division were £1.3 million lower at £18.9 million.

The 350 sports stores recorded growth of 3.2% in the UK and Ireland in the first six weeks of the second half but fashion brands, which include Bank and Scotts, saw a 6% fall in underlying sales over the same period.

PA