Blacks Leisure, the outdoor retailer based in the United Kingdom, said takeover talks with several parties continued while reporting that it's first half pretax loss narrowed and that it had suspended its interim dividend.

The company said in a statement, “As announced on 19 October 2010, the company is in preliminary discussions with several parties regarding either a possible offer for the company or an offer to acquire certain of the company's trading activities and related assets.  These discussions are ongoing although there is no certainty that any formal offers will be forthcoming or as to the terms on which any such offer might be made.”

The 317-store company, which runs the Blacks Outdoor and Millets chains, came close to administration, the British form of Chapter 11, last year before striking a rescue deal with creditors that saw it close over 100 stores.

For the first half ended Aug 28, the company posted loss before tax of
8.5 million pounds ($13.4 million), compared with 15.2 million pounds a year ago. The first half operating loss was reduced to £7.1 million from £8.7 million before exceptional items a year ago.

Sales fell by 22.6% to 90.6 million pounds ($143.1 million), reflecting the reduction in the number of loss-making stores since last year. (All figures were converted from pounds to dollars at current exchange rates.)

Like-for-like sales for the first half decreased 6% in the core
outdoor segment, resulting from continuing difficult trading conditions. But ,
Blacks Leisure said margins had improved in the autumn/winter season and its core outdoor segment's like-for-like sales fell 3.5% in the second-half to date.

Other highlights of the six months:

  • Management also noted that the stock position significantly improved for
    key Autumn/Winter season following action to clear excess Spring/Summer
    stock committed to before implementation of CVAs.

  • The retailers said new or rebranded stores opened in the calendar year to date and
    performing ahead of target.  These 12 stores now account for around 10%
    of the Group's total sales.

  • Revenues of relaunched e-commerce business up by 38% in the first half and by 74% in the second half to date.
  • Central costs reduced by 22% in the period, reflecting ongoing tight focus on the cost base.
  • Discussions are ongoing in respect of a disposal of the remaining 10 Boardwear stores.

David Bernstein, Chairman, said: “The successful implementation of the CVAs (Company Voluntary Arrangements) in late 2009 enabled the Group to rationalise its business and provided the platform for the final phase of the turnaround plan.”

“Notwithstanding a difficult period of trading, the Group reduced operating losses in the first half and commenced the final phase of its turnaround strategy through a programme of expansion and investment in its store estate.”

Neil Gillis, Chief Executive, said: “Whilst trading conditions have continued to be very challenging, we are pleased with the performance of our new stores, which are trading above our expectations, and with the progress made with our programme of initiatives to underpin and protect our position as the leading Outdoor retailer in the UK.”

“The Board believes that the combination of these initiatives, together with the continued success of the new store roll-out, should enable the business to achieve completion of the turnaround programme”