Blacks CEO abandons plans to sell and says the end of downturn is near

The head of outdoor goods retailer Blacks Leisure has abandoned plans to sell the business, believing the High Street downturn will let up in six months.

Britons are curbing spending amid rising unemployment, sliding house prices and recession fears but Blacks Chief Executive Neil Gillis expects consumer confidence to bounce back soon despite 2008 being the worst year in the group's history.

"The recovery will be on us before people realise and I think that will happen in the second half of this year," Gillis told Reuters in an interview on Tuesday.

"People will stay at home every Saturday for a couple of months but after a while they have just got to get out, spend money and enjoy themselves," he said.

Blacks, which has 428 stores selling camping equipment, outdoor clothing and surf wear, has issued four profit warnings since the start of 2008.

However, its boardwear business - 53 Freespirit, Mambo, Animal and O'Neill shops - has consistently underperformed the 368-store outdoor division and saw like-for-like sales fall 19 percent in the 18 weeks to 3 January, compared to a flat performance in the outdoor division.

Late last year Blacks said it would consider selling the boardwear unit but it has since decided to convert the boardwear shops into outdoor stores.

"Everyone wants the bargain of the century and we don't need to do that so we've abandoned that (boardwear sale) process and we're going to convert those stores instead," said Gillis.

Blacks, in the second year of a turnaround plan under Gillis, is in the process of converting 10 of its Freespirit stores to the outdoor format, with the remainder of the boardwear estate set to be changed within two years.

"If it wasn't for boardwear we'd be looking at a business doing significantly better," said Gillis.

The nerves of many chief executives are on edge as insurers continue to cut back their provision of credit insurance for companies supplying some retailers.

Insurers have, in recent months, drastically reduced cover against suppliers of electrical goods retailer DSG International , sporting goods firm JJB Sports and recently collapsed variety chain Woolworths.

Blacks struggled with credit insurance last year but is now in a comfortable position with its suppliers, said Gillis.

Blacks is optimistic about the months ahead, especially with more Britons likely to shun holidays abroad this year.

"In the summer a lot of our business is camping products and there are a lot of indications that the people who take two holidays (a year) will take at least one of them in the UK and we think that will help the business," said Gillis.