T in the Park keeps Blacks out of the red as sales rise

Published on Thursday 17 July 2008 21:36

RISING costs of overseas holidays and the popularity of music festivals have boosted fortunes for outdoor retailer Blacks.

The company yesterday reported a 6.1 per cent rise in sales driven "almost entirely" by sales of camping gear.

Blacks said at its annual general meeting (AGM) that holidaymakers choosing to stay in the UK to cut back on costs as well as music fans camping out at festivals such as T in the Park, had sent sales of tents soaring in July.

And the firm, which also operates the Millets and O'Neill retail brands, said it had selected its two Edinburgh branches – on Frederick Street and Elm Row – as two of five stores to be converted to a new shop format, which has already been trialled in two London stores.

The company said the drive to deliver cost savings was "significantly ahead" of expectations, with year-on-year savings of 2.4 million having already been delivered so far this financial year – against the original full-year target of 3m.

Blacks' improved sales signal a ray of light for the retailer following a tough period over the last couple of years.

The firm earlier this year reported another 12 months of heavy losses following poor sales of boardwear – but said the 9.3m hit was an improvement on 2007's figure of 13.8m.

In May, the group, whose history goes back to 1863, when Thomas Black set up a sail-making business in Greenock, pledged it would make "further radical change" to the business.

Recent shake-ups have included a reduction in Northampton head-office costs and the introduction of more flexible working patterns to ensure in-store service levels can be boosted at busy times.

Around 100 out of 350 jobs have gone at head office, Chief executive Neil Gillis said, and a surfwear warehouse was also closed during May in Washington, Tyne and Wear.

Gillis added that campsites were reporting bookings up 10 per cent up this year as high fuel prices put people off heading abroad. He said: "Our sales rise has almost entirely been driven by camping. What we are seeing now is a lot more people taking holidays in the UK."

He added that one of the chain's best sellers had been a Ministry of Sound "Blackout" tent, which helps shield campers with hangovers from the sun.

With holidaymakers gearing up for camping trips during the school holidays and music fans heading to festivals, the two months account for a fifth of the company's annual sales.

Despite the recent sales boost, Blacks Leisure's overall revenue was down 5.4 per cent during the 19 weeks to 12 July.

Sales for its outdoor arm dipped 2.2 per cent, while overall performance was dragged down by its surf-wear arm Freespirit and O'Neill which reported a 15.5 per cent decrease.

The firm added in its AGM statement that net debt was 6.8m better than the position at the end of June 2007.

The group operates 260 Millets stores, 110 Blacks shops and 58 Freespirit and O'Neill premises.