Blacks intends to reduce the number of stores to about 150. Photo: Kenneth Allen CC-BY-SA-2.0

Losses at the Blacks Leisure stores have punched a hole in the profits of the company that acquired the group after it went into administration.

JD Sports’ profits fell by more than £13m to £3.2m in the first half of the year, brought down by a £10m loss in the outdoor retail section of the Bury-based company.

JD Sports closed 93 of the Blacks and Millets High Street shops in the first six months of 2012 and has shut down another four since.

It warned it will keep its existing 198 stores open during this year but is looking to reduce the number to 150, getting rid of the Millet branding on its shops to leave them all trading as Blacks stores.

Peter Cowgill, executive chairman, said: “In my statement in April I referred to the fact that the Blacks business was in a very fractured state on acquisition.

“We inherited a very limited and unbalanced stock position, with a particularly severe lack of stocks in many core high-performing lines combined with an excessively large and over-rented store portfolio and a disproportionate central cost base.

“As a consequence of these issues, the Blacks business made an operating loss – before exceptional items – of £10m although over £9m of this loss arose in the first three months of the period when the stock position was at its weakest.

“The margin in Blacks has been ahead of expectations in the period reflecting the strong performance of the Peter Storm own brand product in particular.”

Mr Cowgill said the margin was likely to be hit in the second half because camping gear was having to be cleared at reduced prices after a very wet summer.

He added: “We have recently completed our first refurbishment of a Blacks store at St Pauls in London which reopened on 13 August.

“We are encouraged by the early performance of this store. We are also currently refurbishing the Blacks store in Lincoln and intend to refurbish up to four more stores this year.

“We have recruited a new managing director, Ken Reeve, for the business who will start in this role in November.

“We believe that this appointment is a positive move for Blacks as he gained significant relevant outdoor branded experience in his former role as buying and merchandising director at Cotswold Outdoor.”

The chairman said it intended to close its Blacks Northampton warehouse and head office and move it to the central depot in Rochdale.