ON THE BRINK BLACKS SEEN AS WORTHLESS
Blacks Leisure’s share price plunged 57 per cent to just 1.125p
Saturday December 24,2011
OUTDOOR wear retailer Blacks Leisure was on the verge of going into administration yesterday after it admitted that prospective buyers viewed its shares as worthless.
The firm, whose share price plunged 57 per cent to just 1.125p, said it did not expect to receive an offer for its shares, only for its trade, assets and brands.
It raises fears that the group, which owns 98 Blacks outlets and 208 Millets stores and is weighed down by debts of £36million, would be forced into a pre-pack administration allowing buyers, thought to include rivals Go Outdoors and Mountain Warehouse, to cherry-pick its best assets.
A pre-pack administration is an insolvency procedure which sees a company being sold immediately after it has entered administration.
Blacks said it continues to hold talks with a number of selected bidders, also believed to include Scottish clothing group Edinburgh Woollen Mill
The loss-making group, led by chief executive Julia Reynolds and employing 3,600 staff, put itself up for sale after it failed to win backing from shareholders for a turnaround plan that included store refurbishments and online improvements.
Blacks said it continues to hold talks with a number of selected bidders, also believed to include Scottish clothing group Edinburgh Woollen Mill, with a view to securing the future of the business by the end of next month.