UK Retail: Four Buyers Expected To Bid For Blacks Stores
Four interested buyers are expected to table final bids for struggling outdoor clothing retailer Blacks Leisure within the next two days.
The potential buyers - who are understood to include Newcastle United owner Mike Ashley's Sports Direct - are reportedly planning to bid for the majority of the business, which includes Millets and brands such as Peter Storm and Eurohike.
The outdoor clothing group, which owns 98 Blacks outlets and 208 Millets stores, is expected to be sold under a pre-pack administration deal after it said it did not expect an offer for the group's shares, only for its trade, assets and brands.
The loss-making group, which employs 3,600 staff in outlets and at its head office and distribution centre in Northamptonshire, put itself up for sale after failing to secure extra funding to turn around the business.
Professional services firm KPMG is running the sale of Blacks Leisure and is also expected to oversee the administration.
A sale to a trade player - such as Sports Direct - would help save many of the 3,500 jobs but a pre-pack deal would see most of its £36 million of debt wiped out and its worst-performing stores closed.
A pre-pack administration is an insolvency procedure which sees a company being sold immediately after it has entered administration.
The process is viewed as controversial because creditors do not have the opportunity to vote against the proposed asset sale - although the swift sale of the assets is necessary to enable the best price to be achieved.
The new owner is also likely to scale back Blacks Leisure's head office and warehouse in Northampton, which costs the company around £26 million a year, including rent and staff wages.
There had been concerns over the future of the stricken firm after its biggest shareholder, Sports Direct, walked away from buy-out talks, sparking fears of a lack of interest.
But Sports Direct, which owns 22.5% of Blacks Leisure, is now understood to be a forerunner to buy the group out of administration.
Outdoor specialist Mountain Warehouse, retailer Edinburgh Woollen Mill and Sports Direct rival JD Sports have all been named as potential buyers for the company, but it is unclear if they are among the four remaining interested parties.