Blacks Leisure has appointed administrators to its boardwear business, Sandcity.

Richard Fleming and David Costley-Wood from KPMG have been appointed today.

Sandcity operates 11 O’Neill shops across the UK and employs 90 people. All 11 shops are being traded by the administrators and no immediate redundancies have been made. KPMG is seeking a buyer of the business as a going concern. 

Richard Fleming, UK head of restructuring at KPMG, said: “The outdoor leisure market has become increasingly competitive in recent years and, indeed, the leisure market has been affected profoundly by the recession as consumers rein in discretionary spend to focus on more essential items.  The Sandcity boardwear business, operating under the well-known O’Neill brand, continues to trade, however, and we are hopeful of finding a buyer for some or all of the stores.”

KPMG said while the Sandcity stores operate under the O’Neill brand, O’Neill is a separate company and is therefore not affected by the administration.

Yesterday, Blacks Leisure issued a statement saying it feared it would breach a banking covenant due to difficult trading and the under-performing boardwear business. It said the bank had agreed a standstill until November 30.

In a statement today, Blacks said it has now entered into a formal standstill agreement with its bank, Lloyds Banking Group. The standstill is subject to the company delivering a restructuring plan, including actions to achieve an exit of the company’s loss-making stores by October 30.

The retailer said: “Over the last 18 months, the company has been reviewing options to exit from its loss-making Boardwear division.  As part of this review, the company has successfully exited the O’Neill wholesale business, converted a number of stores from Boardwear to Outdoor fascias, and reduced the cost base through a consolidation of the Sandcity and Freespirit management functions. A disposal of the Boardwear business has also been pursued but serious interest in this business was low and structural issues made a discrete sale of this business difficult to achieve.”

It added that the appointment of KPMG follows a review by the directors which concluded that “there is no reasonable prospect of restoring profitability in the medium to long term and that Sandcity is no longer in a position to trade as a going conern”.

The retailer said the administration of Sandcity will “not have a material effect on the company’s other businesses which continue to trade normally”.