Blacks puts O’Neill stores into administration
24 September 2009 09:28
Blacks Leisure Group has placed its subsidiary Sandcity, which runs the O'Neill chain of stores, into administration, saying that "there is no reasonable prospect of restoring profitability in the medium to long term and that Sandcity is no longer in a position to trade as a going concern".
Sandcity accounts for approximately one third of the company's boardwear division and operates out of 11 stores, which trade at a substantial loss.
The move is a result of talks with the group's bank, Lloyds Banking Group, aimed at keeping the Blacks Leisure Group trading. The company announced that it had entered into a formal standstill agreement with its bank, Lloyds Banking Group, in respect of its financial covenant breach until November 30th. However, this is dependent on Blacks delivering a restructuring plan that is acceptable to the bank and addresses the future viability of the group, including actions to achieve an exit of the company's loss-making stores, by October 30th.
The company said that it had been viewing options for its boardwear division for the past 18 months, including a possible disposal, but that interest had been limited and that it had finally decided to place Sandcity into administration.
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