Blacks benefits from lots of snow and loss of Sandcity
11 January 2010 09:34
Blacks Leisure Group has benefitted from the UK's cold snap and a recent restructuring of the business, which saw its loss-making Sandcity subsidiary put into administration.
In the half year from August 29th to January 7th, the company saw a turbulent period, in which it closed 87 of its loss-making stores and put its subsidiary, Sandcity Limited (which operated the O'Neill retail business), into administration.
The group now trades from an ongoing estate of 313 stores in two markets. The core Outdoor Division comprises 208 Millets stores and 92 Blacks stores, whilst the Boardwear Division now comprises just 13 stores trading under the Freespirit fascia and represents only 5% of sales from ongoing stores.
However, trading in the remaining 313 stores during this period was "very healthy" according to Blacks, with like-for-like sales increasing by 12%. Within this figure, the core Outdoor Division performed particularly strongly, with like-for-like sales increasing by 13.1%. The Boardwear Division recorded a like-for-like decrease of 4.4%.
Total group sales in the period were £98.9 million, compared to £102 million in the prior period, largely as a result of the store closures and the administration of Sandcity.
Over the Christmas period, the group delivered a "very strong performance". In the six weeks ended January 7th, like-for-like sales from the ongoing stores increased by 15.2% on last year.
Although the group benefited from the particularly cold weather conditions in the later part of the period under review, like-for-like sales have been ahead of last year for each month since the restructuring plan began to be implemented in September, during more clement weather.
Blacks said that it was considering a fund-raising exercise in order to "refresh the existing store estate, roll out the successful new Outdoor formats and selectively expand the Outdoor Division's store portfolio by re-entering markets vacated following the closure of stores which were over-rented and therefore loss-making even though they consistently achieved high levels of sales".
Neil Gillis, chief executive, said: "I am pleased to announce that the group performed very strongly through its peak trading period, with a healthy and consistent recovery in like-for-like sales growth underlining both the fundamental strength of the Group's offering and the recovery potential of the core estate following the approval of the CVAs in late 2009.
"Proceeds from the potential fundraising being announced today would allow us to accelerate the roll-out of our successful new retail formats, refreshing our estate and expanding it on a selective basis as we focus on realising the potential of the group's market leadership position in outdoor retail. Following the restructuring measures taken in 2009, Blacks Leisure is now a significantly stronger business and is better placed than it has been for some years to build on this recovery".
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