Blacks Leisure Group released a statement last week that it had received a number of proposals for the acquisition of the company, but declined to disclose their origin. According to reports in the British media, which could not be confirmed, the main candidates are Mike Ashley, the entrepreneur who controls Sports Direct, and Lion Capital, the investment group that owns A.S Adventure in Belgium, Bever Zwerfsport in the Netherlands and Cotswold Outdoor in the U.K.
As Blacks is the leading outdoor retailer in the U.K., its takeover would further consolidate Lion Capital’s position in the market. On the other hand Ashley already owns 29 percent of Blacks, and he has been keen on securing its control because of his interests in the outdoor and boardsports segments.
The new action around Blacks sent up the price of its shares on the London Stock Exchange, raising its valuation to a still relatively meager level of just over £16 million (€17.8m-$22.8m). The share price had taken a big plunge after the company reported a 14.9 percent sales decline on a same-store basis in its boardsports stores during the Christmas selling period, contributing to a 3.9 percent decrease for the group.
Blacks has been converting its Freespirit boardsports stores to Blacks and Millets outdoor stores after reportedly trying to sell its action sports retail division at an honorable price.
At about the same time as Blacks’ statement, JJB Sports, Britain’s other languishing sports retailer, issued a statement confirming that it had received a number of non-binding expressions of interest for its profitable fitness clubs business. JJB’s share price had jumped, too, after reports that both Ashley and David Whelan, the founder of JJB, had been exploring this transaction.
JJB said the discussions on this matter were continuing, but cautioned that the expressions of interest were initial and that there could be no certainty that they would result in an acquisition.
On the other hand, JJB announced its decision to place its so-called lifestyle division in administration, a form of Chapter 11 bankruptcy, while hoping that a third party may become interested in buying the businesses. The lifestyle division consists of two shoe retail chains – Original Shoe Company (OSC) and Qube – that JJB purchased separately in a diversification move. OSC previously belonged to Mike Ashley. The trendier Qube belonged to Sir John Hunter, founder of the former Sports Division, which he sold to David Whelan in the 1990s. It is also extending its standstill arrangements in relation to its proposed disposal of its fitness clubs business.
Several other British shoe chains have fallen into financial problems recently, partly because of high store rental charges (more on this in Shoe Intelligence).
In addition, the Warrington-based chain Streetwise Sports is reported to be on the verge of going into administration. The chain has 30 shops, including one in Manchester Arndale, and was sold by Mike Ashley’s Sports Direct two months ago. Streetwise Sports is controlled by Melvyn Reiss and Stephen Mucklow, who acquired the business in December. The company had been bought in 2006 by Sports Direct, which is expected to reveal disappointing trading figures on Wednesday. The news emerged after a meeting of creditors last week.
