Blacks announces expansion plans despite recent store closures
Published: 15 January, 2010
Blacks Leisure, the specialist retailer in outdoor clothing and equipment, has announced plans to expand despite recently shedding a number of loss-making stores.
Directors at Blacks are in discussion over plans to roll out its new Outdoor formats and expand the Outdoor Division’s store portfolio. This would involve raising between £15m and £20m through possible equity fundraising during the first quarter of 2010. The money raised would go towards expanding the number of outlets as well as rejuvenating existing stores.
The expansion would see Blacks re-enter those markets vacated following last month’s store closures. Chief executive, Neil Gillis, said: "Proceeds from the potential fundraising being announced today would allow us to accelerate the roll-out of our successful new retail formats, refreshing our estate and expanding it on a selective basis as we focus on realising the potential of the Group's market leadership position in outdoor retail.
"Following the restructuring measures taken in 2009, Blacks Leisure is now a significantly stronger business and is better placed than it has been for some years to build on this recovery."
According to the real estate team at law firm Stevens & Bolton LLP, landlords are likely to greet this announcement with “some degree of cynicism” after Blacks entered into a CVA last month, closing 87 stores and putting its subsidiary Sandcity Limited into administration.
Insolvency expert and partner at the law firm, Garry Brett, argued: “The very aim of the CVA procedure is to protect the company from abject failure, allowing it to trade out of its difficulties, and hopefully prosper from being given a second chance. Surely landlords are more likely to benefit from a retailer’s recovery than having sites sat empty, particularly given the tax on empty properties?"
However, he added: “One cannot ignore the landlord’s perspective however, as there is a fine line between acting for the good of the company and exploiting the CVA procedure, and I'm not sure that line is being universally observed by Blacks, or that businesses and landlords even agree where the line should be drawn."
