Blacks fights for survival as losses soar

OUTDOOR retailer Blacks Leisure yesterday revealed it had&nbsp; submitted a rescue restructuring plan to its bankers, after reporting its losses had more than doubled in the first six months of the year.<br /><br />Blacks Leisure posted a pre-tax loss of &pound;18.1m in six months to 29 August, compared to the &pound;6.7m loss it reported a year earlier due to poor sales.<br /><br />The firm, which runs the Blacks Outdoor and Millets chains, said it expects to announce the details of its plan shortly, following talks with&nbsp; Lloyds Banking Group.<br /><br />Blacks warned last month it would breach its lending arrangements after worse than expected trading at its surfwear business and at loss-making stores. Lloyds agreed to freeze its lending agreements until 30 November, on condition it came up with an acceptable turnaround plan by 30 October. <br /><br />Blacks plans to close 89 of its stores &ndash; including 50 loss-making boardwear stores that trade under the O&rsquo;Neills brand &ndash; as part of a company voluntary agreement (CVA) with its landlords. As yet it is believed the group has been unable to decide on a compromise with its landlords.<br /><br />It has until the end of November to get out of its stores ?&ndash; but any CVA relies on 75 per cent of its landlords voting in favour of the arrangement.<br /><br />Neil Gillis, Blacks chief executive, said: &ldquo;In the current economic environment it is clear that more radical restructuring measures are needed to free the core Outdoor business from the burden of the loss-making Boardwear business and a tail of stores that have not traded profitably for many years.&rdquo;<br /><br />CVA&rsquo;s have been in the spotlight recently for creating an uneven playing field and penalising landlords for retailers&rsquo; mistakes. &nbsp;<br /><br />This year landlords rejected&nbsp; proposals from Stylo, owner of Barratt and Priceless Shoes &ndash; fearing it would set a precedent. But ailing sportswear company JJB Sports succeeded in winning over creditors to close 100 of its stores in a CVA.