JD Sports Fashion posted a fall in profits yesterday as it admitted it will need more time to revive the ailing outdoor chain Blacks Leisure.
Following its £20m acquisition of the business in January, the Bury-based group said it found Blacks in a "very fractured" state with a severe lack of stock in key lines and a bloated cost base.
It has already closed 81 of the worst performing stores but the £3.5m cost of restructuring and losses of £2.2m from the first three weeks of its ownership left its mark on results for the year to January 28.
While core operations such as its 355 JD Sports and Size? outlets in the UK have continued to perform well, the impact of recent acquisitions meant bottom-line profits fell 14% to £67.4m.
JD said Blacks will continue to drag on earnings in the current financial year, rather than the neutral impact envisaged in January.
Executive chairman Peter Cowgill said the company was still evaluating the right size for the Blacks estate, which currently comprises 215 outlets.
He added: "We inherited a limited and unbalanced stock position, with a particularly severe lack of stocks in many core high performing lines.
"The management team is investing a significant amount of time on developing relationships with the key brands and getting stocks flowing again."
JD warned that further restructuring costs were possible this year as a result of its efforts to rescue Blacks Leisure.
It bought the stores, which trade under the Blacks and Millets names, and the bulk of the rest of the business immediately after Blacks Leisure was put into administration.
Elsewhere in its business, JD reported a satisfactory first nine weeks of the new financial year, with 1% like-for-like sales growth at its sports stores and 2.3% for its fashion division, which includes the brands Bank and Scotts.
The number of the worst-performing Black Leisure stores that have been closed