Clothing firm to close 89 branches.

OUTDOOR clothing firm Blacks Leisure, which is a third owned by Newcastle United owner Mike Ashley, has announced plans to close 89 of its loss-making stores.

The company, which operates 256 Millets shops and 116 Blacks Outdoor outlets, also warned that 50 roles at its Northampton head office were likely to go. There are Blacks branches in Newcastle, the Metrocentre and Durham, and Millets shops in Newcastle, Gateshead and Hexham.

Blacks is under increasing financial pressure and admitted that further restructuring was still required to satisfy banking terms.

Blacks described the 89 shops due to close as a considerable drag on the outdoor division, which has traded profitably over the last two years.

It added: "The vast majority of the stores to be closed have not traded profitably for many years."

The company did not disclose how many jobs will be affected by the store closure plan, which is still subject to employee consultation. Blacks agreed a pounds 40m lending facility with Lloyds Banking Group in July but recent, unexpected difficult trading has meant it is likely to breach its lending terms at the end of September. It has until the end of October to submit an acceptable turnaround plan to the bank.

Mr Ashley, whose main business is running the retailer Sports Direct, owns around 35% of the company.

As part of the restructuring, Blacks last week called in administrators to its 11 O'Neill boardwear stores, putting 90 jobs at risk.

Management said there was no reasonable prospect of restoring loss-making Sandcity - the subsidiary which owns the stores - to profit.

Blacks said the store closures and proposed head office job losses were necessary to ensure the group's survival.

It added: "While it is highly regrettable that the company is having to take these steps, both actions will ultimately strengthen the business and help ensure that a successful and profitable outdoor retailer emerges from the current restructuring process."