Heavy weather: Blacks said last week it had failed to find a buyer but four parties are now said to be interested
JD Sports has emerged as the frontrunner to acquire the bulk of Blacks Leisure, the struggling outdoor clothing retailer, saving the bulk of its 3,500 jobs.
It has seen off competition from Sports Direct International, which owns about a fifth of the company and Peter Jones, the entrepreneur and star of the BBC programme Dragons’ Den, which had on Thursday emerged as one of four bidders for the company’s assets.
JD is expected to buy the bulk of the assets through a so-called “pre-pack” administration, in which a company goes into a formal insolvency process but emerges under new ownership following a pre-arranged asset sale.
The deal means the bulk of jobs at Blacks will be saved. Some rationalisation would have been expected anyway given restructuring likely to be carried out by the new management team.
JD Sports had been expected to retain the bulk of the retailer’s 300 stores and many of its 3,500 staff but shed a costly distribution warehouse and head office.
An announcement could be made over the weekend. Blacks declined to comment.
Any bidder is likely to back Julia Reynolds, the highly regarded former Tesco executive who became Blacks’ chief executive in August.
She has impressed Sports Direct, and is already ringing the changes in the business despite the challenging climate.
“The company expects to be in a position to announce a sale of substantially all of the trade, assets and brands of the group within the next few days,” Blacks said earlier on Friday.
Blacks said all its outlets would continue to trade pending an asset sale. The company’s shares were suspended from trading on the London Stock Exchange with immediate effect.
Blacks had given warning before Christmas that its shares were likely to be worthless. They had closed at 1¼p on Thursday, valuing the company’s equity at just £1m.
The business made a £16m pre-tax loss in the six months to August 27, while its net debt hit £36m in early December amid worsening trading conditions.
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