Blacks Leisure has appointed administrators KPMG to its boardwear business, Sandcity.
Sandcity operates 11 O’Neill shops in the UK and employs 90 people. All 11 shops are being traded by KPMG, which was appointed today. 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 that, while the Sandcity stores operate under the O’Neill brand, O’Neill is a separate company and is therefore not affected.
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. The standstill is subject to the company delivering a restructuring plan to address the viability of the group and a strategy for exiting loss-making stores by October 30.
Over the last 18 months, Blacks has been reviewing options to exit from its loss-making Boardwear division. As part of this review, Blacks exited the O’Neill wholesale business, converted a number of stores from Boardwear to Outdoor fascias, and reduced its cost base.
The administration of Sandcity has resulted in an exit from approximately one third of the Company’s Boardwear division. Blacks Leisure believes that the administration of Sandcity will not have a material effect on the company’s other businesses which continue to trade normally.