Blacks fights for survival after weak first-half

UK: Blacks fights for survival after weak first-half

By Joe Ayling | 23 September 2009

Struggling UK retailer Blacks Leisure Group expects a financial covenant breach under the company's bank facilities this month, having underperformed during the first half of the year.

In a statement to London Stock Exchange, Blacks said it was a result of recent, unexpected difficult trading in the group's boardwear division and at its loss-making stores.

The outdoor wear chain said that if a waiver of the covenant breach is not ultimately given, "the ongoing prospects of the group will be uncertain".

It said the company has been holding "constructive discussions" with its bank, Lloyds Banking Group about the breach. The two parties discussed the expected breach, and a restructuring plan to turnaround the outdoor wear chain, and the bank has agreed in principle to a standstill in respect of the breach until 30 November, it said.

Blacks has also appointed KPMG to work out the full range of options available, and said a further announcement will be made in due course.

Blacks secured an extension to its working capital facility with Lloyds last month, having issued a profit warning the month before.

Sectors: Apparel, Retail

Companies: Blacks Leisure