JD Sports Fashion has warned it will shut more Blacks Leisure stores after the chain it rescued from administration contributed to a sharp fall in profits.
The Bury-based group, which bought the business for £20 million in January, has already closed 93 of the worst performing stores but a further 50 are still under threat as it looks for a long-term estate of 150 sites.
It will also ditch the Millets name as JD plans to use Blacks, which sells own-brands such as Peter Storm and Eurohike, as its single outdoor fascia.
As expected, Blacks recorded a £10m loss in the six months to 28 July, helping to cut JD’s profits to £2.9m from £20.1m a year ago.
However, with the business now stabilised it hopes Blacks will break-even in the second half. JD said it had inherited a business with a severe lack of stock in many core lines as well as an excessively large and overrented store portfolio.
While the company sees a profitable future for the business, it warned that margins in the second half will come under pressure as a result of the need to clear camping products following the wet summer.
Today’s profits reduction at JD was also driven by the cost of transferring to a new centralised warehouse at Rochdale, which is now fully operational.