Blacks in cliff-hanger bid to find a buyer

Blacks Leisure is in danger of falling into administration and being broken up if it fails to find a buyer this week, putting some 2,000 jobs at risk.

The stricken firm, which owns 98 Blacks outlets and 208 Millets stores, suffered a major blow to its survival hopes last week when its biggest shareholder, Sports Direct, walked away from buy-out talks.

Blacks, which put itself up for sale earlier in the month in a bid to stave off collapse amid dire trading, now faces a desperate scramble to find a buyer by its deadline on Thursday.

If it is unsuccessful, the company could go into admin- istration after Christmas and carry out a company voluntary arrangement, which would allow it to write off some of its £36 million debt pile and let buyers close unwanted stores, according to a Sunday newspaper report.

The report claimed that Blacks’ rivals Mountain Warehouse, Cotswold and Go Outdoors were expected to bid for the best stores, leaving 100 outlets and 2,000 staff at risk.

Meanwhile, a separate report said that restructuring specialist Hilco, which in July sold the remnants of Habitat to Home Retail Group, was thought to be interested in buying the trading business out of administration.

The report added that KPMG, which was brought in to handle a sale, was talking to a number of potential buyers, some of whom are interested in buying the whole company, while others are interested in either the Blacks or Millets brands, or “a handful” of its shops.

Blacks, which can trace its roots back to a 19th century sail-making business on the Clyde, put itself up for sale after failing to secure extra funding to turn around the business, which would have included a revamp of its stores.

The retailer, which owns the Peter Storm and Eurohike brands, made a £16m loss in the first half of the year and recently warned that its full-year performance would be worse than expected. Its share price has tumbled more than 95 per cent since the start of the year.

It was hit by the warm weather in October and November as much of its clothing is aimed at harsher conditions, such as fleeces and waterproof jackets.

As Blacks’ biggest shareholder, Newcastle United owner Mike Ashley’s Sports Direct had been seen as the most likely to step in to rescue the ailing retailer, having already tried to buy the company last year.

Blacks came close to collapse in 2009 but survived after a rescue deal was struck with creditors leading to the closure of about 100 stores.