Blacks Leisure Takeover Talks, First Half Losses

Blacks Leisure

United Kingdom outdoor retailer Blacks Leisure, says that takeover talks continue as they report decreasing pretax loss during their first half.

The company said “As announced on 19 October 2010, the Company is in preliminary discussions with several parties regarding either a possible offer for the Company or an offer to acquire certain of the Company’s trading activities and related assets.  These discussions are ongoing although there is no certainty that any formal offers will be forthcoming or as to the terms on which any such offer might be made.”

The company was near administration, the British version of Chapter 11, last year when they made a deal with creditors. Blacks Leisure implemented Company Voluntary Arrangements (CVAs) in order to turn the company around, closing 88 loss-making stores, which included a large portion of the Boardwear stores. Previously Blacks Leisure owned 412 stores and now own 317 stores.

Blacks Leisure also opened 12 new or rebranded stores that are performing ahead of target and makeup approximately 10 percent of total sales.

Loss before tax decreased from £15.2 million in the first half of 2009 to £8.5 million this year.

Operating losses during the first half, ending August 28, 2010, were reduced to £7.1 million as compared to £8.7 million before exceptional items in 2009. Sales decreased 22.6 percent during the first half to £90.6 million from £116.9 million in 2009 due to the closure of loss-making stores.

The company says that revenue from their re-launched e-commerce site grew 38 percent in the first half and 74 percent in the second half to date.

Chief Executive Neil Gillis says, “Whilst trading conditions have continued to be very challenging, we are pleased with the performance of our new stores, which are trading above our expectations, and with the progress made with our programme of initiatives to underpin and protect our position as the leading Outdoor retailer in the UK.”

“The Board believes that the combination of these initiatives, together with the continued success of the new store roll-out, should enable the business to achieve completion of the turnaround programme”