Blacks purchase to hit JD Sports' earnings
Retailer JD Sports has said its rescue deal for Northampton-based Blacks Leisure will lead to a reduction in its full-year earnings.
The company bought Blacks in a £20m pre-pack on Monday (9 January 2012) after beating off competition from Sports Direct owner Mike Ashley and Dragons' Den star Peter Jones.
In a statement to the London Stock Exchange for the five weeks to 7 January 2012, JD said gross like-for-like sales in the UK and Ireland increased by 1.6 per cent. It added that after taking into account the impact of the additional VAT, the net like-for-like sales increased by 0.1 per cent.
However, it added that although gross profit margins had been "broadly" in line with the prior year, the acquisition of the trading assets and trade of Blacks Leisure will lead to a "small reduction" in earnings in the current year.
Blacks traded from 302 stores at the point of its administration. In addition to selling third party brands such as North Face and Berghaus, the company also had two own brands in Eurohike and Peter Storm.
JD said it would evaluate the performance of each store in the coming months in order to decide how many stores will be retained in the long-term. The senior management team, including chief executive Julia Reynolds, will also be kept on.
