Blacks will lose at least £10m says new owner JD

AILING outdoor retailer Blacks will make operating losses of £10m this year, while restructuring costs of up to £5m may also be incurred, new owner JD Sports Fashion said.

Bury-based JD said it is working hard to turn Blacks around following the acquisition of the business from administrators in January.

In a trading update for the 19 weeks to last Saturday (June 9) JD reported solid like-for-like sales growth of 1.5% in its core business, but acknowledged that gross margins are being pressured in an “offer driven market.”

The group reiterated its guidance that this and investment in other parts of the business would impact the core retail results particularly in the first half.

Addressing the Blacks challenge JD said: “We are presently continuing to address the significant operating issues in turning round the business.

“The anticipated level of the operating loss in the Blacks business in the current year is £10m with the potential for a further up to £5m charge for restructuring.”
 
JD said it expects the bulk of the operating loss would be in the first half of the year, and “remains of the view that Black’s market position can be exploited profitably in the medium term.

“Our immediate priority is to significantly improve the customer proposition,” the company added.

In conclusion JD said: “The board maintains its belief that the group remains exceptionally well positioned to take advantage of any opportunities, both in the UK and internationally, with its retail propositions, brand connections, financial resources and management experience.”