Retailer JD Sports Fashion said on Monday it had purchased the trade, assets and brands of Blacks Leisure from the outdoor store group's administrator, KPMG, for 20 million pounds.

In a so-called pre-pack deal, which had been expected since Friday, Blacks was declared insolvent and went into administration before immediately re-emerging under JD Sports' ownership.

Loss-making Blacks trades from 290 Blacks Outdoor and Millets stores and also owns the Eurohike and Peter Storm brands. JD Sports trades from over 500 UK stores.

We will evaluate the performance of each store in the coming months in order to reach a conclusion about the number of stores which will be retained long term, JD Sports said, adding that it will retain the firm's senior management, led by Julia Reynolds.

Following the elimination of any underperforming stores and other cost reduction initiatives we believe the business can be run successfully as independent fascias within the group, it said.

JD Sports said the deal will lead to a minor reduction in earnings in the remainder of the year to January 28 2012, and anticipates that Blacks will not make a material difference to its overall performance in the following year.

Shares in the firm closed up 6.1 percent at 700 pence.

JD Sports will update on Christmas trading on Thursday.

In a separate statement KPMG said the proceeds of the sale would be used to repay Blacks' outstanding debt to lender Bank of Scotland. Blacks' shareholders will get nothing.

(Reporting by James Davey; editing by Paul Sandle)