A reprieve for outdoor clothing retailer Millets dragged on soaring profits for parent company JD Sports after it reversed plans to scrap the chain.
The group had planned to merge the business with another business, Blacks, after it bought the brands out of administration but earlier this year changed its mind and decided to keep Millets going, saving a number of stores.
But it meant that the outdoor division had 157 outlets instead of an expected 130, resulting in a shortage of own-brand products.
In the wake of the decision, operating losses across the two businesses narrowed only slightly from £10 million to £8.9 million in the six months to the start of August, while revenues fell 17% to £43 million.
However, JD Sports more than doubled pre-tax profits over the period to £6.1 million, buoyed by an exceptional performance from its sports division, and despite losses for fashion brands Bank and Scotts.
The group said it had completed the reorganisation of its outdoor businesses, reducing costs and overhauling management following disappointing results after it was acquired in January 2012.
It decided to keep Blacks and Millets separate saying they attracted "fundamentally different consumers" and appointed former Go Outdoors executive Lee Bagnall as managing director of the latter.
However the reprieve for Millets meant that instead of 130 Blacks stores, the outdoor division had a total of 157, comprising 81 Blacks and 76 Millets.
"The decision to continue with the Millets fascia created a shortage of own brand product adding to the margin impact of pricing pressure on branded products," the group said.
The outdoor brands did enjoy an uplift from the very cold weather in February and March which helped it to shift excess heavy winter jackets from the previous autumn and winter seasons though they had to take a hit on profits for them.
Managers are focused on delivering a "significantly improved performance" for the second half of the year, the group said.
Fashion brands Bank and Scotts also recorded operating losses though with an improving picture for Scotts. An overhaul is underway at Bank after it appointed former Asos executive Gwynn Milligan as managing director.
The JD Sports chain itself saw revenues charge ahead to £413 million and underlying operating profits improve by 55% on UK and Ireland sales up 7.5% on a like-for-like basis .
Group executive chairman Peter Cowgill admitted reorganisation of its outdoor and fashion brands had a negative impact on the overall group results.
But he added: "We strongly believe that the decisive actions which we have taken were necessary for these businesses to deliver returns in the long term."
Performance since the end of the first half has improved, in sport and fashion in the UK and Ireland, with like-for-like sales up 2.8% in the five weeks to September 7.
Mr Cowgill added: "We maintain our belief that the product proposition for the outdoor fascias has improved significantly for the second half of the year but it is too early in the season to make any further comment on the performance."