At meetings this week, the creditors and members of Blacks Leisure Group and its subsidiary The Outdoor Group (TOG) approved company voluntary arrangements (CVAs) with the landlords of hundreds of stores. The CVAs will settle the claims from landlords of 101 stores that are closed or closing and another nine that had guarantees from the company. They will also change the lease terms for 291 stores to monthly payments instead of quarterly ones for a year and a half.
Neil Gillis, chief executive of Blacks, said the CVAs had both passed with the approval of more than 97 percent of the creditors yesterday. Yesterday, Blacks' CVA was approved by 99.98 percent of the members, while the TOG agreement was OKed by 100 percent of members voting. If no legal challenges are posed to the agreements, they are expected to go into effect around Dec. 23.
CVAs are arrangements with specific kinds of creditors that prevent a company from going into administration, a form of insolvency. Another British sports retailer,JJB Sports, used this technique earlier this year.
Corry Taylor, the recently elected chairman of the Outdoor Industries Association of the U.K., said earlier this month that his group would offer support and advice to business and individuals affected. He noted that the outdoor industry in the U.K. was doing well relative to other sectors and urged people not to extrapolate Blacks’ problems to the whole industry.
The financial difficulties of Blacks are playing into the hands of competitors such as Cotswold Outdoor, a British chain of 42 stores owned by AS Adventure in Belgium. Reportedly, Cotswold is not interested in taking over the sites being phased out by Blacks, but will continue to open new doors.Eight Cotswold stores have gone on stream so far this year and three more are expected before year-end, according to Drapers magazine. The retailer enjoyed 9.7 percent sales growth on a same-store basis in the 44 weeks ended last Oct. 31. Total revenues for the full year are expected to rise by nearly 30 percent to £72 million (€79.9m-$119.6m).