Outdoor retailer Blacks Leisure ploughed on with its store expansion plans today in defiance of a potential takeover swoop by Mike Ashley’s Sports Direct.
Blacks said two new outlets had already opened and another three were in the pipeline as it looks to continue its turnaround strategy, despite the Sports World parent’s moves to scupper its efforts to fund the additions.
Last month Sports Direct snapped up 28.5% of Blacks and vowed to stop its rival raising money from shareholders for the enlargement. It has since confirmed it is considering a bid for the firm.
But today Blacks said the store roll-out was being funded by cashflow within the business after strong trading over the Christmas period.
It said in the absence of a takeover offer it would continue alternative plans to raise money and was in the process of negotiating further sites for both its Blacks and Millets brands.
The firm said terms have been agreed on five new Blacks stores in Glasgow, Chester, York, Cheltenham and Stratford-upon-Avon.
Of these, the York and Chester branches have begun trading and Blacks said “early customer reaction has been very positive”.
Chief executive Neil Gillis said: “We are now two years into the turnaround programme for Blacks Leisure.
“The restructuring of the company last year has put us into an ideal position to now expand the business and the commencement of the store rollout programme is a critical point in the next phase of this turnaround programme.”
In February Sports Direct’s intervention forced Blacks to adjourn a shareholder ballot on its £20m fundraising, intended for use on up to 35 new stores.
Sports Direct – controlled by Newcastle United owner Mr Ashley – effectively paid for the stake in Blacks a second time after its Sportsdirect.com retail business bought the Blacks stake and an 11% holding in JD Sports Fashion from Ernst & Young, the administrator of collapsed bank Kaupthing Singer & Friedlander.
It had been locked in a dispute with Ernst & Young over ownership of the holdings since October 2008, with litigation on the issue set to continue despite the shares acquisition.
Blacks has suffered a difficult past couple of years, leading to a restructuring and the closure 87 loss-making stores in the fourth quarter of 2009 after securing a rescue deal with its landlords.
It has since reported improved trading and wants to refurbish its core estate and reopen shops in areas where it has closed stores that it felt were subject to high rents and therefore loss-making despite strong sales.
Including the new additions, the company has around 320 Blacks, Millets and Freespirit stores.
It employs around 5,500 staff in stores and at its head office and distribution centre in Northamptonshire.
