Blacks Leisure has dumped plans to sell boardsports chain Freespirit following a review of the business' future.
The potential sale caused a row with major shareholder and Sports Direct owner Mike Ashley earlier in the year, who threatened to block any deal. Blacks Leisure said it would retain the chain and continue to develop it.
The company slipped into the red for the first half of this year, although a strong recovery at Millets help boost like of like sales.
The group, which runs the Blacks, Millets and Freespirit chains, reported a loss of £0.6m for the 26 weeks to September 1, on sales of £146.8m.
However, like for like sales at the group's Millets chain grew 6.4% over the period, contributing to like for like rise across the group of 3%. Like for like sales for the seven weeks to October 20 were up 1.5%.
The company said that group margin and overall performance had been impacted by aggressive stock clearance during March.
Chairman David Bernstein said that an improved summer season boded well for the rest of the year. He said: "Millets has shown an impressive sales turnaround and all the outdoor brands have benefited from product development and increased focus on retail basics."
He said the outlook for the whole year was in line with expectations, provided normal autumn and winter weather conditions continue.
The company has also bought the European rights for the Mambo surfwear brand for £1m.