Sports Direct to give Blacks a helping hand
FTSE 250 high street retailer Sport Direct has reportedly offered to share its warehousing, supply chain and IT capability with struggling peer Blacks Leisure, according to the Financial Times.
FTSE 250 high street retailer Sport Direct has reportedly offered to share its warehousing, supply chain and IT capability with struggling peer Blacks Leisure, according to the Financial Times.
The paper, citing people familiar with matter, says that Sport Direct (which owns a 21% stake in Blacks) has proposed a joint venture which would help the smaller retailer refinance near-£40m of debt by scaling back costs.
While Blacks would continue to run the front-end business, Sports Direct would manage the back-end operations, the FT said.
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On 25 November, Blacks issued a profit warning after further weakening of trading conditions and this morning, the firm invited offers to support further investment in the group, after having failed to drum up sufficient financial support from shareholders and potential new investors. This is most likely to involve a sale of the company or sale of one or more of the group's brands, it said.
Shares plummeted after the announcement, dropping from yesterday's closing price of 3.75p to 1.6p in early trade. By 10:56, they were trading around 2p. The price is well under the 52-week high of 42.25p reached at the start of January.
"As at 5 December, the group's net bank debt was approximately £36m. Given the current level of debt within the group, there can be no assurance that any sale would attribute value to the ordinary shares of the group," the firm said.
BC
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