Blacks Leisure submits restructuring plan as losses widen
02 November 2009 09:38
Blacks Leisure Group has been forced to submit a restructuring plan to its bank in order to secure its future after losses more than doubled in the first half. Blacks said that Lloyds Banking Group had accepted it as an acceptable proposal and discussions were ongoing. Lloyds Banking Group had agreed to freeze the company's lending agreements until November 30th, on the condition that an acceptable turnaround plan was delivered by October 30th.
In the 26 weeks ended August 29th, the company saw group like-for-like sales decline by 1.1%, although like-for-like sales increased by 3.8% in the 2 months ended October 27th excluding closing stores. Group loss before tax and exceptional items was £11.9 million, compared to a loss of £4.5 million in 2008.
Neil Gillis, chief executive, said: "In the current economic environment it is clear that more radical restructuring measures are needed to free the core Outdoor business from the burden of the loss-making boardwear business and a tail of stores that have not traded profitably for many years. We will work with our advisors, KPMG, to implement the restructuring plan which will enable us to eliminate these losses. We expect to be in a position to announce further details of the restructuring shortly. We are confident that the actions taken and proposed to be taken will ultimately strengthen the business and help ensure that a strong and successful Outdoor retailer emerges from this process".
Administrators of the group's boardwear division Sandcity closed six stores this week with the loss of 67 jobs in Birmingham, Glasgow, Milton Keynes, Bluewater, Manchester Trafford Centre and Manchester Triangle. However, KPMG said it had safeguarded more than 40 jobs by transferring another four stores to boardwear firm O'Neill and one store to stationery chain Paperchase.
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