Outdoor retailer Blacks Leisure expects to make a pretax loss of around £4.5m this year because of poor trading activity, especially during August, and a sales drop of 16% in the Boardwear market.

It said today that despite trading satisfactorily for the first half of the year the second half had proved more challenging and it would announce the loss in its interim results at the end of the month.

It said: ‘During the first half the Outdoor business performed broadly in line with expectations, recording a like for like sales decrease of 5.2% against a strong comparative in the previous year of +5.6%.

'The Boardwear market, however, continued to be very difficult and the performance of this division has been below expectations, with like for like sales falling by 16.1%. Group like for like sales were down 7.7% in the first half.’

The group said it continued to make good progress in driving further cost savings in the business.

‘The level of savings achieved to date is ahead of original expectations, with a year on year reduction of £5.6m already delivered. In addition, working capital continues to be managed very effectively, with stocks at the half year being approximately 12% below the same point last year,’ it said.

It said that the integration of Sandcity, which distributes and retails O’Neill in the UK, had been successfully completed and the combined Boardwear business was operating from the group's head office with a reduced level of overhead.

‘Exceptional restructure costs of £1.2m have been incurred in this process. The first half will also include an increase in the exceptional onerous lease provision of approximately £1m,’ it said.

In outdoor retailing, Millets now trades from 260 stores and Blacks Outdoor from 110 stores, including 11 out of town stores.

In Boardwear, Freespirit now operates from 44 stores, two of which are Mambo and three are Animal, while O'Neill trades from 13 stores.