A second CVA may be looming for struggling outdoor goods retailer Blacks, according to one City analyst who values the retailer at just 1p per share after sales plummeted.

FinnCap analyst David Stoddart said: “It’s going to be like pushing water uphill trying to revive Blacks in this difficult retail landscape. A CVA is looking increasing likely.”

Blacks sales plunged 9.7% in the 19 weeks to July 9. It has extended its borrowing facilities with lender Bank of Scotland from £35m to £40m until December 15, and may raise new capital.

Blacks chief executive Neil Gillis, who will be replaced by Julia Reynolds next month, said the City had overreacted to the update and said a CVA was not on the cards.

He said: “It is difficult for me to comment on the group’s future plans, however, the CVA in 2009 removed the vast majority of unprofitable stores and I would be very surprised if Julia looked at another one.”

A source close to the business said the retailer may be a prime target for private equity interest. The source said: “The share price suggests there is no value in the business. Private equity players will be looking at it trying to find otherwise.”

Gillis said the sales dive was because of dry weather in the spring and that signs were positive going into the peak camping season – like-for-likes rose 3.2% in the last six weeks.

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