Plans for the revival of ailing outdoor chain Blacks Leisure have been frustrated by poor Christmas trading and "significant" annual losses.
JD Sports Fashion, which bought Blacks out of administration a year ago, blamed the weak performance on merchandise brought in by previous management and said it was confident results will improve in 2013.
However, the level of losses incurred in the year to January will cause group results to be at the lower end of City forecasts.
The update on Blacks, which includes former Millets stores in a 176-strong estate, offset another record period for the core JD Sports business, with like-for-like sales for the seven weeks to January 5 up by 3.2%.
Executive chairman Peter Cowgill said it had been "another very robust" performance from its sports stores, and recent trading has been the strongest it has seen for some time.
He added: "While the performance of outdoor has been disappointing, we remain confident this business will produce returns."
Having closed around 100 of the worst performing Blacks stores as it looks to eliminate a high rent bill, JD said the remaining portfolio and benefit of store refurbishments should boost the outlook for sales.
Blacks recorded a £10 mil-lion loss in the six months to July 28 but in November JD said it hoped a good Christmas could help the business break even in the second half.
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