Healthy profits, for the time being at least
Blacks Leisure, the outdoor specialist, has posted a healthy profit rise but warned of a difficult trading outlook for the rest of the year.

The retailer, which operates the Millets chain, a boardwear business and eponymous shops, reported that the good weather had helped sales of summer camping and walking gear but waterproof clothing and footwear had suffered.

Interim pre-tax profit climbed 12 per cent to£6.9 million on sales up just 1 per cent to£140 million. Like-for-like retail sales were down 4.8 per cent, falling to 11.8 per cent in the first eight weeks of the second half.

Chairman David Bernstein said: 'Having achieved a satisfactory improvement in profits in the first half, the board remains positive about prospects for the year as a whole, given more normal climatic conditions over the key Christmas period.'

He said that strong gross margins had compensated for sluggish sales. However, he warned that the 3 per cent uplift in gross margin at the interim stage 'will not be wholly maintained in the second half as the effect of the weak dollar and the impact of heavy discounting in our boardwear business in the prior year reduces.'

At the Blacks chain, the fledgling out-of-town format has met expectations, and lessons learned from the first four shops will be applied to openings in the second half.

At the boardwear division, O'Neill shops 'performed better, with improved gross margins and reduced costs' but the distribution arm was hit by weak demand from independent retailers. The 46 FreeSpirit outlets delivered 'a good improvement in performance'.

Bernstein said: 'We will continue to review strategic alliances and acquisition opportunities, particularly given the difficult retail climate. However, we are value acquirers and must see significant added benefit to our business in the potential target.'

New transactional web sites are being developed for Blacks, Millets and FreeSpirit.