Blacks still casts shadow despite upbeat JD Sports news

Sports and fashion retailer JD Sports today reported an improvement in sales growth but warned the Blacks Leisure business it rescued from administration will cost it up to £15 million in this financial year.

The group, which bought the outdoor gear supplier for £20m in January, predicted full-year operating losses of £10m and up to £5m of restructuring charges as it bids to revive the business.

The update came as JD, which also owns the Bank and Size? fashion stores, said trading had improved in recent weeks but warned margins were under pressure amid fierce discounting.

Like-for-like sales were up 1.5 per cent in the 19 weeks to 9 June, which represents an improvement on the growth rate of 1.2 per cent previously reported for the nine weeks to the end of March.

Freddie George, retail analyst at Seymour Pierce, said: “We now believe the integration and return to profitability of Blacks will take longer than expected and we now do not expect Blacks will break even until 2015 at the earliest.”

JD has closed 81 Blacks stores since buying the chain, which made an operating loss of £2.2m in the first three weeks under its ownership, and said its immediate priority was to “significantly improve” its appeal to customers.