Suffolk/Essex: Uncertainty grows for Blacks and Millets workers
OUTDOOR leisure equipment retail group Blacks suffered a further blow today as its biggest shareholder withdrew its interest in buying the business.
Blacks Leisure, which owns 208 Millets outlets as well as 98 Blacks stores, put itselft up for sale earlier this month amid continued poor trading and a �36million debt burden.
Sports Direct, the retail business owned by Newcastle United FC owner Mike Ashley, which owns 22.5% of Blacks, was seen as a possible buyer, having made an unsuccessful bid to buy the company last year, but today ruled itself out.
The news adds to the uncertainty for staff at the group, which 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.
However, Blacks – which also owns the Peter Storm and Eurohike clothing and camping equipment brands – said earlier this week that Sports Direct was one of a number interested parties, so there remains some hope of a rescue from elsewhere.
The board of Blacks decided to seek a buyer after failing to secure extra funding from shareholders for turnaround plans, which were to have include a revamp of its stores.
However, it warned at the outset that any deal achieved was unlikely to offer any value to shareholders as its debts far exceed its market value, which has fallen by more than 95% since the start of this year to less than �2million.
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Blacks posted a �16m loss in the first half of the year and recently warned that its full-year performance would be even worse than expected, with sales having taken a further hit from the mild weather in October and November which resulted in less demand than usual for lines such as fleeces and waterproof jackets.
Blacks, which has hired accountants and business advisers firm KPMG to advise it on the sale process, hopes to conclude a deal by the end of January.
Some retail analysts that Sports Direct, which has challenged Blacks in recent months with its discount outdoor brands Karrimor and Field & Trek, could still bid for parts of the group should it fall into administration, with the Blacks chain seen as substantially more attractive than Millets.