Blacks puts itself up for sale
Struggling UK sporting goods retailer Blacks has abandoned plans to raise fresh capital and put itself up for sale again, the Financial Times has reported.
Blacks, which owns 98 Blacks outlets and 208 Millets stores, warned that any sale of the company or its brands, which also include Peter Storm and Eurohike, was unlikely to offer value to shareholders as its £36 million debt far exceeds its market value of £3.2 million.
The group, which made a £16 million loss in the first half of the year and recently warned that its full-year performance would be worse than expected, has been hit by low consumer confidence and squeezed household budgets.
The directors had hoped to secure funding for a turnaround of the business, which would have included a revamp of its stores, but its shareholders, which include Newcastle United owner Mike Ashley’s Sports Direct, failed to put up the cash required.
Sports Direct is understood to have proposed a joint venture with Blacks to merge its warehousing and IT operations, which would help raise the funding Blacks requires for its strategic overhaul through cost savings. But the sale announcement suggests any such offer has been turned down.
Mr Ashley’s company, the largest shareholder with a 21% stake, launched a failed takeover bid for Blacks in 2010 and turned down an equity raising in April.
Some retail analysts believed Sports Direct, which has challenged Blacks in recent months with its discount outdoor brands Karrimor and Field & Trek, will only purchase the business or its brands through administration if it becomes insolvent.
