Plans for the revival of ailing outdoor chain Blacks Leisure have been frustrated by poor Christmas trading and “significant” annual losses.
JD Sports Fashion, which bought Blacks out of administration a year ago, blamed the weak performance on merchandise brought in by a previous management team and said it was confident results will improve in 2013.
However, the significant level of losses incurred by Blacks in the year to January will cause group results to be at the lower end of City forecasts.
The update on Blacks, which includes former Millets stores within a 176-strong estate, offset another record period for the core JD Sports business, with like-for-like sales for the seven weeks to January 5 up by 3.2 per cent.
Executive chairman Peter Cowgill said it had been “another very robust” performance from its sports stores and that trading in recent weeks has been the strongest the company has seen for some time.
He added: “Whilst the performance of outdoor has been disappointing, we remain confident that this business will produce future returns.”
Having closed around 100 of the worst performing Blacks stores as it looks to eliminate a high rent bill, JD said the remaining portfolio and benefit of store refurbishments should boost the outlook for sales.
The company said: “The next (financial) year will also see the benefit of cost reductions in various areas of the business and we anticipate that losses will reduce substantially as the new year progresses.”