Comparable store sales tumbled by 7.5 percent at Blacks Leisure Group, the leading British outdoor retailer, for the 17 weeks to the end of June. The company pointed to disappointing sales in May, though it performed in line with expectations during other weeks of this period. The drop was probably due to unseasonable weather conditions.
The drop was caused by a long spell of very dry weather in the U.K., which deprived Blacks of its usually important sales of raingear. The unfavorable impact of the weather in May was compounded by the general elections held in the country that month, which were marked by uncertainty over possible budgetary cuts.
Blacks’ overall sales declined to £53.9 million (€63.9m-$82.2m), compared with £76.9 million (€91.8m-$118.6m) for the same period in 2009, due to the closure of 107 stores as part of the restructuring plan it launched last year. On the other hand, Blacks pointed out that its gross margin increased by 1 percentage point for the period.
Blacks said that it had gone ahead swiftly with its reorganization plan after raising £19.7 million (€23.4m-$30.0m) through a placement and an open offer of new shares in March. It restructured its debt; opened seven stores, all trading under the Blacks banner; and has plans to open another eight stores by the end of its financial year.
The new formula appears to be working well, since its sales per square foot are now on average 39 percent above those of other stores. Further plans ahead of the winter include the launch of a customer loyalty card, a training program for the staff, and more branded ranges that will be exclusive to Blacks.
The company’s annual general shareholders’ meeting approved all the resolutions proposed by its board of directors, without any surprises. Tom Knight is going to join the board from the start of next month. Knight was an executive director at Blacks for 15 years until 2002 and he went on to become chief executive of another big British sporting goods chain, JJB Sports, for the subsequent five years.