Outdoor clothing and equipment retailer Blacks Leisure has announced today that it is formally up for sale after failing to secure the adequate funds to finance its restructuring.
Blacks has seen a whole new management team appointed and a new strategic plan created in the last few months to combat sliding sales and a reduction in profits.
Initially the group, which owns brands such as Millets, Alpine, Blacks and Peter Storm, had hoped that the refinancing of its bank loans or a strengthening of its capital structure would be enough to fund a turnaround of the business but has now conceded that only a sale of part or all of the company will be sufficient to ensure its ongoing existence.
A statement from the group today read: “The group has now met with the majority (by value) of its existing shareholders and also a number of potential new investors.
“Although the directors were encouraged by the response to the group‘s strategic plans and by the support expressed for the new management team, the directors do not believe that the group will be able to complete a fundraising which would provide for the equity requirements of the group on the basis of its current capital structure and indebtedness.
“As a result, the directors now wish to invite offers to support further investment in the group, which is most likely to involve a sale of the company or sale of one or more of the group‘s brands.”
Net bank debt for the group stood at £36 million as of the start of this week but Blacks did not update the market on current trading as part of its announcement.
Blacks issued a profits warning at the end of November, reporting that sales had further slowed following the 7.2 per cent decline in trading recorded in the group‘s first half ending August 27th 2011.
Since May the company has appointed a new CEO and new Chairman, Julia Reynolds and Peter Williams respectively, who have put together a plan to kick-start the business by improving its multichannel operations, as well as re-assessing its product mix.
The retailer‘s main lender Bank of Scotland is supportive of the proposed sale process, which Blacks hopes will be concluded some time in January.