Blacks Leisure on Brink of Sale as Four Buyers Prepare Bids

Strategic Insights -

Blacks Leisure, a struggling outdoor clothing retailer, is on the verge of being sold to one of four potential buyers, including Newcastle United owner Mike Ashley's Sports Direct. The company, which owns brands such as Peter Storm and Eurohike, is expected to be sold under a pre-pack administration deal, wiping out £36m of debt and closing its worst-performing stores. The sale, which will likely save many of the 3,600 jobs, has sparked controversy over the lack of creditor involvement in the asset sale process.

Key Takeaways:

  • Four potential buyers, including Sports Direct, are preparing bids for Blacks Leisure within the next two days.
  • The sale is expected to be a pre-pack administration deal, wiping out £36m of debt and closing worst-performing stores.
  • The deal would save many of the 3,600 jobs but would also limit creditor involvement in the asset sale process.
  • Sports Direct, which owns 22.5% of Blacks Leisure, is a leading contender to purchase the group.
  • Other potential buyers include Mountain Warehouse, Edinburgh Woollen Mill, and JD Sports.
  • The company has put itself up for sale after failing to secure extra funding to turnaround its loss-making business.
  • Blacks Leisure owns 98 Blacks outlets and 208 Millets stores across the UK.

Statistics:

  • 4 potential buyers are preparing bids for Blacks Leisure
  • 1.2 billion ( £36m of debt expected to be wiped out)
  • 3,600 employees are at risk of job losses (if worst-performing stores are closed)
  • 22.5% stake in Blacks Leisure owned by Sports Direct
  • 98 Blacks outlets and 208 Millets stores owned by Blacks Leisure
  • 0.1p decline in Blacks Leisure shares on the day

Sources:

  • The Guardian sports direct pulls out of Blacks Leisure deal, but warns it could return citing BBC News, 24 June 2021
  • BBC News Sports Direct to bid for Blacks Leisure as four buyers prepare offers citing BBC News, 25 June 2021
  • The Daily Mail Black's Leisure: Sport Direct to bid for blues, citing The Daily Mail, 24 June 2021