JD Sports buys Blacks´ business for GBP20 million

JD Sports Fashion confirmed on Monday its purchase of the trade, assets and brands of Blacks Leisure from the group's administrator, KPMG, for 20 million pounds. ''We are delighted to add another leading multi-branded retail proposition to our

portfolio of retail businesses.  We believe with the support of JD's operational disciplines and financial strength, along with the existing Blacks management team, we can restore the Blacks business to a profitable market leading position,'' Peter Cowgill, Executive Chairman of JD Sports Fashion Plc, said.

Thanks to this ´pre-packed deal´, JD Sports has saved the 290 stores, which trade under the Blacks and Millets names, from administration. In virtue of the agreement, Blacks was declared insolvent and went into administration before been immediately absorbed under JD Sports' ownership, reported Reuters.

Therefore, the stores, the stock, and the brands including Eurohike and Peter Storm, will be transferred to JD Sports, but its debts of more than £30 million will be scrapped, since creditors have not had the opportunity to vote against the proposed asset sale.

Shares in the company were suspended last week. Blacks audited accounts for the period ended 26 February 2011 showed an operating loss of £2.5 million.

JD said the deal would lead to a "minor reduction" in earnings in the year to January 28 but it anticipates the following year's figures will not be materially affected, reported AP.

“We will be retaining a senior management team at Blacks led by the Chief Executive, Julia Reynolds. Following the elimination of any underperforming stores and other cost reduction initiatives we believe the business can be run successfully as independent fascias within the Group,” the company announced in a statement.