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Struggling outdoor goods retailer Blacks Leisure today set out the details of a long-awaited £42.5 million restructuring plan with its lender, Lloyds Banking Group, which could save nearly 4300 jobs.
But the details of the company voluntary arrangement still need to be accepted by Blacks's landlords and shareholders.
The latest plan involves dumping more than 100 closed stores and varying lease terms or extending rent payment times on others. Landlords are being asked to agree to financial concessions in order to help secure Blacks's survival.
Today the retailer tried to make the deal more acceptable to disgruntled landlords by setting aside a £7.25 million compensation pot, about six months' rent each.
Blacks made a £18 million pre-tax loss in the first half of the year.
Chief executive Neil Gillis said the plan and banking facility supporting it would “provide a realistic opportunity to ensure the survival of the core outdoor business”.
Reader views (1)
The problem is that Blacks are insolvent, although their turnover is over £100 million their overheads are more than they earn, but this is typical of Britain today, just as people buying houses entered into mortgages which they cannot now pay, shops like Blacks entered into contracts whereby they agreed to lease shop premises in the high end rent sector and now they want to back out, a contract (lease) is a contract which cannot be broken without punitive financial disadvantages to the tenant, and that is at the landlords discretion, even if they manage to borrow £42 MILLION,this is only to pay outstanding rent etc, and if they get it they will be in so much debt "forever" they can never return to profit. The best thing to do is go into liquidation, and Lloyds could then offer any new entrepreneur who wants to take over an EX-Blacks shop an interest free loan of K200 for 12 months to get the enterprise rolling, well they can afford to take it out of the £42 million which in my opinion is too much money by far to be lent to any one organisation which is insolvent.
- Nosmo King, Tebay, 03/11/2009 17:29
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