Suffolk/Essex: Blacks and Millets owner fuels administration speculation
STRUGGLING outdoor activities equipment retailer Blacks Leisure today fuelled speculation that it could go into administration, so allowing rivals to cherry-pick its best assets
The loss-making group, which operates 98 Blacks stores and a further 208 under the Millets named, put itself up for sale earlier this month after failing to secure cash from shareholders to fund a turnaround plan.
Its biggest shareholder, Sports Direct, controlled by Newcastle United FC owner Mike Ashley, was seen as the most likely buyer, having launched an unsuccessful takeover bid for Blacks last year, but it walked away from talks a week ago.
Although negotiations are continuing with other potential buyers, Blacks said today that it did not expect to receive any offers for its shares, only for its trade, assets and brands.
The interested parities are understood to rival retailers Edinburgh Woollen Mill and Mountain Warehouse, but there is also speculation that Sports Direct could return to the table should Blacks go into administration.
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Shares in Blacks Leisure fell sharply following the update and have now lost 97% of their value since the start of the year, giving the company a market value of less than �1million.
Blacks, which also owns the Peter Storm and Eurohike clothing and camping equipment brands, employs around 3,600 people across its stores network and its head office and distribution centre in Northamptonshire.
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The group has both Blacks and Millets branches in Ipswich, Colchester and Chelmsford plus further Millets stores in Sudbury, Lowestoft and Saffron Walden and a Blacks outlet in Bury St Edmunds.
The group, which has a debt pile of �36m, suffered a �16m loss during the first half of this year and recently warned that its full-year performance would be even worse than expected.
Besides feeling the effects of the squeeze on consumer spending, amid high inflation and muted wage growth, the group was hit by the warm weather in October and November as much of its clothing is aimed at harsher conditions, such as fleeces and waterproof jackets.