Cost cutting offsets sales dip at Blacks

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Date: Thursday 17 Jul 2008

LONDON (ShareCast) - Outdoor clothing retailer Blacks Leisure said its cost savings programme is ahead of schedule and boosting pre-tax profits despite a dip in sales.

In the 19 weeks to 12 July the company has delivered cost savings of £2.4m, well on the way to its full-year target of savings of £3m.

Like-for-like (LFL) sales at its Outdoor business are down 2.2% against “tough comparative” figures, while LFL sales at Boardwear are down 15.5%.

For the group as a whole, LFL sales are down 5.4%. However, LFL sales in July are up 6.1% as the peak camping season gets underway.

Inventory management has been improved with stocks running 12.4% (£8m) below last year’s level, contributing to a £6.8m improvement in the company’s bet debt position compared with this time last year.

The new store format on trial in two stores in Kensington and Holborn is getting the thumbs-up from customers, with both stores trading ahead of expectations. The company plans to convert five more stores to the new format in September.

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