Sandcity claws back money as stores sold

Sandcity, the boardwear clothing subsidiary of Blacks Leisure Group, will
transfer four of the leasehold stores to former suppliers O’Neill.

Parent company Blacks Leisure ran into financial difficulty earlier this year
and had to place Sandcity in administration following talks with lenders Lloyds.

In return the banks granted Blacks a formal freeze on banking covenants,
which the company was on the verge of breaching, until 30 November

The Leeds, Sheffield, Bristol and Brighton stores of Sandcity will transfer
to O’Neill effective immediately, saving up to 35 jobs.

A further nine jobs will be saved from transferring the leasehold in York to
card shop Paperchase.

The six remaining stores in Birmingham, Glasgow, Milton Keynes, Bluewater and
Manchester have closed with 67 people losing their jobs.

Richard Fleming, UK head of restructuring at KPMG, said: “We are delighted to
have concluded a deal which will see four of the stores continuing to trade
under the original O’Neill brand, with a fifth transferring to Paperchase.”

“However, these remain incredibly tough times for businesses operating in the
leisure market, and it is with regret that we have had to close the remaining
six stores,” he added.

There is growing speculation Blacks is seeking to enter into a Company
Voluntary Arrangement giving them breathing space from creditors. This will mean
an agreement will be reached with lenders on future repayments of all or some of
the debt.

Last year a director at Blacks Leisure Group, was sacked following an
investigation into accounting irregularities

Further reading:

Blacks Leisure mulls CVA

Related reading