Blacks eyes capital raising as sales slump

 
City A.M. Reporter
Outdoor goods firm Blacks Leisure has said recent sales had missed forecasts, driving up debts and forcing it to look at raising capital.

The group, which struck a rescue deal with creditors in 2009 that saw it close over 100 stores, said it had agreed a temporary extension of its existing bank loan arrangements and, given their maturity in November 2012, would start to look at refinancing them.

"The board is also considering the group's overall capital requirements with a view to strengthening its capital structure," it added, without elaborating.

Many British retailers are struggling, and some including Focus DIY, Oddbins and Habitat UK have recently fallen into administration, as shoppers cut back amid rising prices, subdued wages growth and austerity measures.

Blacks Leisure, which runs the Blacks Outdoor and Millets chains, said sales at stores open over a year dropped 9.7 per cent net of VAT sales tax in the 19 weeks to 9 July, though they were up 3.2 per cent in the last six weeks of the period.

"Since the year end the group's indebtedness has increased significantly due to both normal seasonal factors and the challenging market conditions," it said, without giving a figure.

Despite weaker-than-expected sales, gross profit margins were flat, the group said.