JD Sports Fashion has warned that it may need to close more Blacks Leisure stores. This comes after the JD Sports bought it out of administration for £20m in January.
The group has already closed 93 of the worst performing stores but a further 50 may need to close as it targets long-term estate of around 150 sites.
It has also said that it is likely to drop the Millets brands and concentrate exclusively on the Blacks name.
As expected, Blacks recorded a £10million loss in the six months to July 28, helping to cut JD’s profits to £2.9m from £20.1m a year ago.
JD Sports said it had inherited a business with a severe lack of stock in many core lines as well as an excessively large and over-rented store portfolio. What is more the very wet summer saw a fall in camping products which will need to be cleared.
The 350 sports stores recorded growth of 3.2% in the UK and Ireland in the first six weeks of the second half but fashion brands, which include Bank and Scotts, saw a 6% fall in underlying sales over the same period.
The retail sector is still under some strain and many shops are still paying rents that were agreed during the boom years. However that was 5 years ago and rent reviews and break clauses may start to alleviate some of the pressures.
Read our retailer rescue pages for more information on how to survive the difficult market.