Blacks boss says bid interest shows turnaround has begun

As Blacks revealed first-half results last week, Gillis said: “We have been approached but we’re right at the beginning of that

process. I’m open minded about a possible sale but what I do think is that it’s a sign that our turnaround is working.”

Gillis, who has been involved in buying and selling businesses in the past, said Blacks was in the last phase of its turnaround and had started to see the recovery.

The retailer is understood to have received a bid approach from specialist outdoor group Go Outdoors, chaired by serial dealmaker John Lovering, as revealed by Retail-week.com.

Others thought to have approached Blacks include private equity groups, understood to include Lion Capital, owner of AS Adventure Group, which is the parent of Cotswold Outdoor.

Blacks has appointed corporate adviser McQueen to oversee the bid process.

Blacks reported first-half operating losses reduced to £7.1m in the 26 weeks to August 28, compared with £8.7m in the comparable period. Sales fell 22.6% to £90.6m, which the retailer said reflected the implementation of a CVA in December 2009 that enabled 88 loss-making stores to be axed.

Gillis said Blacks’ 12 new or rebranded stores were performing ahead of target indicating “that we’re moving in the right direction”. The stores now account for about 10% of the group’s total sales. It has a target of a total of 15 new stores for this year, and a further 20 next year.

Blacks said current trading in the autumn season had delivered in improved margins because the retailer had started with a clean stock position. The like-for-like sales fall in the core outdoors business improved to 3.5% in the second half.

Gillis said he was confident going into Christmas and that “consumer confidence is gradually improving”. He acknowledged, however: “The big issue for next year will be the cost of raw materials.”

Finncap analyst Dave Stoddart said: “With the consumer background remaining challenging, a potential bidder will need to identify significant synergies to justify much of a premium. The presence of multiple bidders provides competitive tension, so we remain holders.”

Go Outdoors declined to comment on its potential interest in Blacks.