Rns...4 Jan 2011 11:40
(Adds detail, CEO comment, analysts' comments, share price.) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--U.K. outdoor clothing and equipment retailer Blacks Leisure Group PLC (BSLA.LN) Tuesday said it expects talks with potential suitors to conclude within weeks. The firm, which Tuesday posted solid Christmas trading figures after arctic weather conditions last month boosted demand for its waterproof jackets and boots, first announced in October that it was in offer talks with a number of parties interested in buying all or parts of its business. "It's a massive distraction on the business as these are approaches that have been made to us," Chief Executive Neil Gillis told Dow Jones Newswires. "We need to now know if we've got an offer that we can take to shareholders or whether to close the process down, but I'd expect the process will be concluded in weeks," he said. Severe weather conditions across the U.K. last month look set to have thwarted a key trading period for many retailers, but Blacks--which specializes in selling outdoor-based items like waterproof jackets, boots and rucksacks--got a boost from the heavy snowfall. Sales from its stores open more than a year rose 10.2% on the year during December, with total sales climbing 12.9% in the same month. The firm trades as Millets and Blacks. Seymour Pierce analyst Freddie George told clients in a note that Blacks' trading update is "significantly better than expected," but follows disappointing half-year results. He is forecasting the group to make a full-year pretax loss of GBP2 million. FinnCap's David Stoddart said the festive figures serve as a reminder of how heavily influenced Blacks is by the weather, while Arden Partners' Nick Bubb said it is no surprise Blacks' update is good. "If an outdoor clothing retailer didn't do well in one of the coldest months we've had in recent years then it should pack up and go home," he told clients. The strong performance offsets weaker summer trading, when Blacks was left with excess stock that it had to sell at cut-price after closing 107 stores as part of a restructuring program. At 1125 GMT, Blacks Leisure shares were trading 2 pence, or 5.6%, higher at 42 pence, outperforming a 0.5% rise in the FTSE Fledgling index. While the severe weather has played its part in boosting demand for Blacks' products, the firm also said December gross margin was stronger than a year earlier, which Seymour Pierce's George said indicates that price discounting isn't behind the sales gains. Blacks, which plans to open a new store next month, said its newest and most recently-invested 12 stores are now generating more than 10% of total group sales, which it said is "one of the most encouraging aspects" of its recent performance. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; hannah.benjamin@dowjones.com (END) Dow Jones Newswires January 04, 2011 06:35 ET (11:35 GMT)
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