Blacks Leisure is gradually recovering from its troubled past. The leading British outdoor retailer, which has been seeking a buyer in vain at a reasonable price, ended its fiscal year on Feb. 26 with a pre-tax loss reduced to £5.3 million (€5.9m-$8.7m) from £43.6 million in the prior year.
Simultaneously with the presentation of the latest figures, Blacks introduced a new chief executive, Julia Reynolds, who served most recently as CEO of figleaves.com, a British online retailer of lingerie, and before that as category director at Tesco, the British supermarket chain, will replace Neil Gillis, who decided to resign last February.
The total sales of Blacks Leisure were down by 16 percent for the year, with a 6.1 percent drop on a comparative basis. They reached £201.9 million (€224.7m-$332.8m). The overall number of doors decreased slightly in the course of the year, down from 313 to 308. The shops that were shut down were either small or underperformers. On the other hand, Blacks opened or re-branded 13 new and larger stores which already contribute an amazing 10 percent to the chain’s overall revenues.
To some extent, the management blamed the flat performance on the ongoing difficult consumption environment in the U.K. which left the entire retail business in the country challenging, especially in the first half of the fiscal year with its controversial economic conditions that led to a decline of 6 percent in the chain’s core outdoor business.
On the other hand, business was by far better in the second half with snowy weather and a robust Christmas season. The outdoor segment grew then by more than 10 percent.
Boardwear, a category which Blacks is devesting in the months to come was, however, down by breathtaking 28.5 percent on a like-to-like basis. Online sales jumped by impressive 44.2 percent, but still contribute a very small share to the overall sales. The share of the internet business increased from 2.7 to 4.8 percent last year. The management targets to expand this distribution channel this year.
The gross margin slipped from 51.6 percent to 48.7 percent or respectively 49.6 percent excluding exceptional items. Major factors for this decline were the strengthening of the U.S. currency and strong purchases which were still based on a larger number of stores.
The latter effect led to excessive stock clearing in the first half of the fiscal year nad clashed with poor sales in the same period.