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Blacks Leisure shares slump on appeal for bidder | Blacks Leisure shares slump on appeal for bidder |
(7 days later) | |
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Shares in Blacks Leisure fell 50% after the retailer issued an appeal for a white knight investor to rescue it by buying the firm or one of its brands. | Shares in Blacks Leisure fell 50% after the retailer issued an appeal for a white knight investor to rescue it by buying the firm or one of its brands. |
The troubled camping and outdoor clothes retailer said it was making the appeal after meeting major shareholders and investors to raise capital. | The troubled camping and outdoor clothes retailer said it was making the appeal after meeting major shareholders and investors to raise capital. |
Blacks warned last month that sales in the crucial Christmas period would be weaker than had been expected. | Blacks warned last month that sales in the crucial Christmas period would be weaker than had been expected. |
Management are targeting a sale by January, the company said. | Management are targeting a sale by January, the company said. |
Blacks warned that shareholders may not gain if the ailing business is sold. | Blacks warned that shareholders may not gain if the ailing business is sold. |
Competition | Competition |
Matthew Stych, a retail analyst at Planet Retail thinks that Blacks has been subject to increasing competition on price. | Matthew Stych, a retail analyst at Planet Retail thinks that Blacks has been subject to increasing competition on price. |
"Supermarkets have certainly played their part in Blacks' current predicament," he said. | "Supermarkets have certainly played their part in Blacks' current predicament," he said. |
He points to online retailers like Amazon and out-of-town outlets like Decathlon who also undercut Blacks on price. | He points to online retailers like Amazon and out-of-town outlets like Decathlon who also undercut Blacks on price. |
Mr Stych thinks the company is unable to compete with specialists such as Snow & Rock on the instore consumer experience: "Customer service is one of the few differentiators that High Street based retailers have left these days," he said. | Mr Stych thinks the company is unable to compete with specialists such as Snow & Rock on the instore consumer experience: "Customer service is one of the few differentiators that High Street based retailers have left these days," he said. |
Having no clear idea of what the brand represents is also a problem for the ailing retailer according to brand expert Tim Hipperson. | Having no clear idea of what the brand represents is also a problem for the ailing retailer according to brand expert Tim Hipperson. |
"Is it a hiking/camping store, or does it cater to extreme sports enthusiasts? No-one is really sure," he said. | "Is it a hiking/camping store, or does it cater to extreme sports enthusiasts? No-one is really sure," he said. |
Mr Hipperson thinks Blacks should have been a beneficiary of the trend in the UK towards staycations and healthy living. | Mr Hipperson thinks Blacks should have been a beneficiary of the trend in the UK towards staycations and healthy living. |
"The brand has lost touch with its customer base and due to its lack of definition is not attracting new shoppers," he said. | "The brand has lost touch with its customer base and due to its lack of definition is not attracting new shoppers," he said. |
Sale | Sale |
The company said it had the support of Bank of Scotland, its main lender. | The company said it had the support of Bank of Scotland, its main lender. |
"Given the current level of debt within the group, there can be no assurance that any sale would attribute value to the ordinary shares of the group," a company statement warned. | "Given the current level of debt within the group, there can be no assurance that any sale would attribute value to the ordinary shares of the group," a company statement warned. |
Blacks currently has £36m of net bank debt. | Blacks currently has £36m of net bank debt. |
The firm has appointed accountants KPMG to find potential buyers. | The firm has appointed accountants KPMG to find potential buyers. |
It said it had obtained a waiver from the takeover panel to ensure that any potential buyer can remain anonymous and avoid rules that would normally compel it to make a formal offer within 28 days. | It said it had obtained a waiver from the takeover panel to ensure that any potential buyer can remain anonymous and avoid rules that would normally compel it to make a formal offer within 28 days. |