Blacks Leisure eyes debt facility as sales slow
Published: 15 July 2011
Sales continue to slide at Northampton-based Blacks Leisure Group as it turned to a £40m banking facility to help lift ailing revenue. The retailer offered another blow to a bleak UK high street this morning as it announced sales fell from £61.3m to £54.6m in a six-month trading update. In a statement, the company admitted the sales figures were "below expectations".
The retailer also said its indebtedness had increased "significantly" since the end of last year. Blacks attributed the poor performance to both "normal seasonal factors and the challenging market conditions affecting the UK retail sector as a whole".
As a result of growing debt, Blacks said it had agreed to extend and increase its banking facilities.
The retailer will extend its loan faculties with Bank of Scotland and agreed terms on an additional short term facility.
Black Leisure will now have facilities of up to £40m until 15 December 2011.
The retailer, which sells outdoor clothing, footwear and equipment, made the announcement through an interim management statement for the 19-week period from 27 February 2011 to 9 July 2011.
Total sales fell more than £6m over the 19 weeks compared to the comparable 2010 period. Like-for-like sales for the period were also 9.7 per cent below last year.
In a statement, the company said: "Although sales for the period were below our expectations, we have maintained gross margins and controlled overheads. Furthermore, the group's performance has seen an improving trend as the financial year has progressed."
Blacks Leisure said like-for-like sales for the six weeks since the end of May were 3.2 per cent ahead of last year.
Over the six-month period, the company said it had implemented its previously announced plan to exit fully from the boardwear market and focus on the outdoor division.
Three Freespirit stores have been converted to the Blacks fascia and one store lease surrendered during the period under review.
The remaining five stores are in the process of withdrawing from Boardwear, said Blacks.
In May this year, Blacks posted a pre-tax loss of £5.3m in its year-end results.
Former Figleaves boss Julia Reynolds will take up her appointment as chief executive of the company on 1 August, Blacks confirmed this morning.
