Suffolk/Essex: Uncertainty for store workers as Blacks goes up for sale
STAFF at more than a dozen Blacks and Millets outdoor clothing and equipment stores across East Anglia are facing an uncertain future after parent group Blacks Leisure put itself up for sale.
The move by the loss-making company, which owns 98 Blacks outlets and 208 Millets stores, represents a last-ditch effort to save the business from collapse.
But the group, which also owns the Peter Storm and Eurohike clothing and camping equipment brands, warned that shareholders were unlikely to see any benefit, with the company’s stockmarket valuation dwarfed by its �36million of debt.
Blacks has seen its share price plummet by around 95% since January as its problems have deepened.
It reported a �16m loss for the first half of the year and has since warned that its full-year performance will be even worse than expected. Yesterday’s announcement prompted a further fall the share price, cutting its market value to less than �1.5m.
Like many retailers, Blacks has suffered from the squeeze on household budgets, amid high inflation and muted wage growth, and the fall in consumer confidence in response to growing uncertainty over the wider economic outlook.
The unseasonal warm weather in October and November has also hit the company’s sales, with much of its clothing offer being aimed at harsher conditions.
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The Blacks board had hoped to secure funding for a turnaround of the business, which would have included a revamp of its stores, but its shareholders, which include Newcastle United FC owner Mike Ashley’s Sports Direct group, declined to put up the cash.
Sports Direct, the largest shareholder with a 21% stake, launched a failed takeover bid for Blacks in 2010 and turned down a proposed equity raising in April this year.
Blacks said today that it would complete the sales process through professional services firm KPMG and hoped to have found a buyer by January.
Sports Direct, which has outdoor brands of its own in Karrimor and Field & Trek, is seen as a potential purchaser, although analysts see the Blacks chain as substantially more attractive than Millets.
The Blacks and Millets fascias are both represented in Ipswich, Colchester and Chelmsford while there are also Millets stores in Sudbury, Lowestoft and Saffron Walden a branch of Blacks in Bury St Edmunds.