Blacks Leisure: JD Sports set to buy retailer
- 6 January 2012
- From the section Business
JD Sports looks set to buy the assets of Blacks Leisure, the struggling outdoor clothing retailer which employs about 3,500 staff.
The deal is expected to be completed via a pre-pack arrangement, under which Blacks will briefly go into administration before being bought.
It will wipe out the value of existing shares, which have been suspended from trading on the London Stock Exchange.
The BBC understands the pre-pack deal is expected to be completed on Monday.
There were reports on Friday evening that JD had offered about £20m for Blacks Leisure, which has 98 Blacks outlets and 208 Millets stores.
Blacks had previously said it had received a number of final offers for the bulk of the business and expected to announce a deal in the next few days.
Peter Jones, the Dragon's Den entrepreneur, was tipped as a possible bidder. He announced on Twitter on Friday that he is not buying the firm.
"You'll no doubt find out who the buyer is later today," he added.
Sports Direct, which has a 22.5% stake in Blacks, was also thought to have been on the final shortlist of bidders.
Scottish clothes chain Edinburgh Woollen Mill and outdoor goods firm Mountain Warehouse are believed to have dropped out of the running.
Three partners from accountancy firm KPMG are expected to be appointed administrators, but only once details of an immediate onward sale of the company's key trade, assets and brands has been finalised.
A pre-pack administration is one in which the insolvent company has already arranged for a buyer of its profitable assets beforehand.
It will also allow the firm to write off its £36m debts, and help it to close down loss-making parts of the business.
Any buyer is expected to require the closure of, or job losses at, Blacks' head office and warehouse in Northampton. Blacks also owns the Peter Storm and Eurohike brands.
Last month, Blacks appealed for an investor to rescue it, by buying the firm or its brands.
Blacks reported a £16m loss for the first half of its financial year and last month warned that its annual results would be worse than expected.
The company's shares had fallen by 97% over the last 12 months prior to their suspension of trading on Friday.
Blacks warned before Christmas that its shares were virtually worthless, and closed at 1.25p on Thursday, valuing the company at £1m.