Blacks said conditions on the high street mean it has experienced ‘downward pressure’ on consumer confidence and spending. Which, judging by the £16m loss it reported in its first half, is understating the matter rather. It probably doesn’t help that, as pointed out by Topshop boss Sir Philip ‘Goldilocks’ Green yesterday, after last year’s big freeze, this autumn has been warmer than usual, putting people off buying warm clothes. And Blacks arguably has a lot more to worry about in that respect, given that people replace sleeping bags a lot less frequently than clothes. Might we suggest a Kate Moss-inspired collection in time for spring/summer 2012?
Analysts don’t seem to be awfully positive about Blacks’ outlook: Kate Calvert at retail analyst Seymour Pierce said it ‘will remain a challenge to come up with an acceptable solution for the company’s long-term future’. At least it’s got the backing of its bank, RBS, though: the company said in its statement that while it ‘will need additional funding in order to execute its strategic plans’, the bank ‘continue[s] to be supportive’. Which is a relief.
Blacks isn't the only one having problems. Water company Severn Trent has reported a 35% fall in first-half profits today. The company said its exposure to Italy (it owns a stake in Italian water services firm SII) meant its water services division took a hit of £21.9m, pushing pre-tax profits down to £65m in the six months to the end of September, down from £101m in the same period last year.