Outdoor clothing retailer Blacks Leisure has placed its struggling boardwear division Sandcity into administration, and may enter a CVA itself.
KPMG has been appointed as administrators to Sandcity, which runs 11 underperforming O'Neill stores.
The administrators are to continue to trade the business, which has 90 employees, while a buyer is sought. No redundancies have been made at the O'Neill stores.
Sandcity was losing cash and had brought the company close to breaching its banking covenants before the move into administration.
Blacks Leisure is thought to have about 80 loss-making stores out of its portfolio of 115 Blacks, 250 Millets and over 30 Freespirit shops. The closure of these stores followed by a CVA is considered to be a highly likely course of action.
It has been speculated that Mike Ashley's Sports Direct could have an interest in Blacks Leisure, which already owns a 29.9% stake and put in a bid approach in March. Others are of the opinion that supply chain issues and some problematic leases could prove off-putting to potential buyers.
