Things are turning around for Blacks Leisure after a rough year. The British retail company said that for the six weeks ended Jan. 7, comparable store sales rose by 12 percent. The outdoor division saw an increase of even 13.1 percent in comparable store sales, while the boardwear division dropped by 4.4 percent.
Group revenues for the period fell by 3.0 percent to £98.9 million (€113.8m-$160.9m), but that was not really too bad considering that Blacks shut down 87 of its loss-making stores and Sandcity, the surf subsidiary of the group that runs the national O’Neill business, went into administration, the British equivalent of bankruptcy.
Christmas was good for the group, with comparable store sales up by 15.2 percent for the six weeks ended Jan. 7 compared with the year before. Blacks has been doing well since it started its reorganization in September, with an extra boost from exceptionally cold weather toward the end of the six months. The new format implemented for its outdoor stores over the last 18 months continued to generate good sell-throughs.
Combined with its recent negotiation of better terms with the landlords of its stores, these good results leave Blacks’s board of directors considering the possible issue of new shares worth between £15 million (€17.3m-$24.2m) and £20 million (€23.0m-$32.6m) in the first quarter of 2010.
The proceeds would be used to refresh existing stores, expand the new outdoor store format and add new outdoor stores, particularly in places where it had to shut down a well-performing store just because the rent was too high.
Attractive new leases should be available now in these areas. The money from a stock offering could also be used to cancel a high-interest bank facility of £7.5 million (€8.6m-$12.2m).
The vast majority of the group’s 313 existing stores is now in the outdoor sector, which comprises 208 Millets stores and 92 Blacks stores. The boardwear division consists of only 13 Freespirit stores and represents 5 percent of the remaining stores’ revenues.