Blacks Leisure expects full-year profits to be below market estimates, although like-for-like sales over Christmas rose 2.8 per cent and total sales climbed 2 per cent.

For the six weeks to January 12, like-for-like sales rose 5.4 per cent at Blacks and 7.8 per cent at Millets.

However, performances at Blacks’ boardwear brands, Freespirit and O’Neill, were much weaker, with like-for-likes down 10.8 per cent.

For the 19 weeks to January 12, like-for-like sales fell 1.2 per cent and total retail sales dropped 1.5 per cent.

Black’s new management team, headed by chief executive Neil Gillis, has finalised its plans for a turnaround with a series of phased initiatives.

Blacks wants to reduce the cost base of the business by£3 million in the next financial year and it will test a range of new store formats from March to better differentiate Blacks and Millets, as well as update its boardwear proposition.

The management will rationalise its range with a more narrow base of key suppliers to deliver better sales.

Gillis said: “As the performance during Christmas has shown, the Blacks and Millets propositions are fundamentally sound. We have begun a programme to return the business to historic profit levels with an initial focus on the cost base and a subsequent range of initiatives to drive turnover in the future.

“In 2008, we anticipate sales growth will be hard to deliver in a tough market for clothing retail but it is our intention to create year-on-year profit growth through efficiency gains and cost base reduction. The retailing initiatives we are testing in 2008 will form the basis of our plan for the sales-led recovery of the business from 2009 onwards.”

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