Citing weakening marketing conditions, Blacks Leisure Group predicted that its results will be below expectations and that it will thus need additional funding to execute its strategic plans, notably by strengthening its capital structure among other options. The announcement sent the value of its shares on the London Stock Exchange immediately down by 61 percent to £1.70 in early trading.

The British outdoor retailer said that it continued to experience “challenging trading conditions in a tough economic environment” in the 26 weeks ended last Aug. 27, and that the situation weakened further in the last few weeks because of ongoing downward pressure on consumer confidence and on consumer spending, especially on discretionary items. This has led to lower-than-expected sales levels, leading Blacks to lower its profit margins in order to promote higher sales.

Blacks' analysis of the market situation is not very different from that of other retailers in the U.K. Citing the increase in the VAT of 2.5 percentage points and other austerity measures, Deloitte has seen a much higher level of discounting among British retailers in the last few weeks. While online retailers have continued to grow, traditional brick-and-mortar retailers have seen their sales decline at a rate of around 2 percent on an annual basis, the consultancy said, predicting no turnaround in the overall retail market until 2013.

Deloitte added that a flat Christmas selling period would be the most positive outcome for U.K. retailers. Blacks said its own results for the financial year ending in January will be largely dependent on the important Christmas period, but based on recent trading, they will likely be lower than expected.

The difficult markt situation in the U.K. has been highlighted by other retailers. While predicting that its earnings will be in line with expectations, a financially healthier player on the wider British sporting goods market, JD Sports Fashion has admitted in its own interim trading statement that its performance has been impacted since Sept. 17 by continued downward pressures on all kinds of discretionary consumer spending and by a decline in consumer confidence. The management of the company, which is controlled by Pentland Group, is expecting a tough Christmas selling period, although it says it has a good track record of mobilizing effectively through this key time of the year (more in SGI Europe).