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Update: Blacks sold to JD Sports

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10th Jan 2012
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Outdoor retail clothing firm Blacks Leisure confirmed on Monday that it had gone into a pre-pack administration and been sold to JD Sports for £20m.

As expected, the outdoor clothing retailer confirmed KPMG as administrator of the deal and that there will therefore be no value attributable to the company's ordinary shares.

Last month, the firms’ directors announced they would put the business up for sale after failing to secure extra funding to turn the business around.

The outdoor clothing retailer, which owns 98 Blacks outlets and 208 Millets stores and employs 3,600 staff, said it planned to appoint KPMG as administrator to organise a pre-packaged administration after a number of offers were received for the group.  

Dragons' Den judge Peter Jones was thought to be one of those submitting offers to the group but said on Twitter: “To quell all rumours I'm not buying Blacks Leisure.” 

Blacks bought the Outdoor Group, which included Millets and Free Spirit, for £51m in November 1999 but has suffered financial difficulties throughout its 25-year history. In 2009 it arranged a company voluntary agreement (CVA) with creditors, and fought off a £26m takeover bid from Sports Direct, whose owner Mike Ashley holds a 22.5% stake in the company.

Despite the popularity of so-called ‘staycation’ camping holidays in the UK following the 2008 credit crunch, Blacks failed to capitalise. Nor did the growing market for tents and wellies at some of the UK’s biggest festivals help them survive financially.

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By Metrobrit
06th Jan 2012 20:41

Is it just me?

Pre-pack administration effectively means they will dump most of the £38 million in debt before they sell the company. I am assuming only those with reservation of title will get any money or at least their goods back, if they can meet the criteria of course.

Yes we are one of the creditors, not a huge amount c. £2.5k, but nevertheless a creditor.

And this is the second time, they did the same at the end of 2009 when they went into administration to renegotiate some leases, as I understand it. At the time, I refused to give them credit until the administration had completed, I wish I had held that decision longer now.

OK so the pre-pack will save some jobs and I suppose in some respects the company, but the people paying for this are the suppliers and creditors, and doubtless when the list comes out the Revenue will be one of the biggest ones, so actually it effects us all.

Yes I know the arguments, a pre-pack can only go ahead if the creditors are in a "better" position than would have been the case in a liquidation, but it doesn't feel like that as a creditor. And certainly (and I know this is not the case here) not when the original owners are the people to whom the company is "sold"

Is it just me that finds these pre-pack deals somewhat distasteful, I thought that the Office of Fair Trading was going to report on these pre-packs, and I have not see that yet, although I may have missed it.

The whole issue of Pre-packs and Phoenixing needs revisiting, I have no doubt that some of the Outdoor Group creditors will face very real and severe challenges due to this decision, and yet whomsoever buys the company will start trading the day after sale, with no debts, and doubtless a very good negotiated price for the closing stock.

I suppose the argument is that the alternative would not be better for anyone, but it does seem that the pre-pack has gone from being a valid concept to save unfortunate companies and staff, to a more widely used tool to dump debt and move on.

I am not saying that is the case here by the way, but there certainly appears to have been a large rise in the use of pre-packs, so there has been movement in the criteria obviously, or a re-evaluation of the criteria at least. I'm not an insolvency practioner, so I claim no expertise in what has happened, simply and obviously an interested party.

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By Robert Lovell
09th Jan 2012 10:47

BRC warns of more retail administrations

 

An increase in retail administrations - from 165 in 2010 to 183 in 2011 - shows how trading conditions have toughened and how important it is that the UK’s governments support the sector by reducing new taxes and regulatory burdens.

Responding to the statistics released by Deloitte, the British Retail Consortium (BRC) agrees with its warning that more administrations are likely in the coming months, particularly with business rates due to rise by 5.6 per cent in April.

Administrations for the fourth quarter of 2011 were up more than 25% compared with the same period a year earlier, following some improvements since the recession of 2008.

British Retail Consortium director general, Stephen Robertson, said: “2011 was a tough year with virtually no real terms growth for retailers. In such a competitive sector there will always be businesses that do well while others struggle but seeing such a high number of failures in the final quarter of the year is particularly alarming.

“The next few months are bound to be quieter as consumers rein in spending after Christmas. Retailers are doing their bit by controlling their own costs and keeping prices down for customers despite steep increases in transport and utility bills. The UK’s governments need to support the sector’s efforts to survive, thrive and maintain jobs by holding back the costs for which they are responsible, including business rates, retail levies and the burden of regulation.

“Retailers don’t ask for hand-outs but they do deserve help overcoming some of the barriers to business success. Retail failures leave gaps on our high streets and can result in thousands of job losses. As the private sector’s biggest employer and a major source of jobs for the under 25s, retail needs politicians to recognise the folly of making life harder than it already is.”

The BRC’s Retail Sales Monitor for December, measuring the sector’s performance during the most crucial month of the year, is released tomorrow (Tuesday).

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By Natalie Brandweiner
09th Jan 2012 17:30

Blacks Leisure sold to JD Sports

Blacks Leisure today announced the sale of the brand, assets and group to JD Sports for £20m. 

The outdoor clothing retailer also confirmed KPMG as administrators of the deal and that there will therefore be no value attributable to the company's ordinary shares.

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By carnmores
11th Jan 2012 16:00

its all about risk management

presumably you either couldnt or wouldnt insure your supplies, hope the loss is beraable

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