THE managing director of the North-East division of outdoor clothing firm Blacks Leisure was yesterday dismissed from his post after an investigation into "accounting discrepancies".

Darren Spurling was suspended from his position with Sand city, based in Washington, Tyne and Wear, in March, after parent company Blacks found a £2m hole in the company's accounts.

The Washington base, which comprised a warehouse and distribution centre, was closed last month to revive the loss-making business. Fifty jobs were lost in the region, with work and the Sandcity headquarters relocated to Northampton.

Yesterday, Blacks - in which Newcastle United owner Mike Ashley holds a 29 per cent stake - said that after a near threemonth suspension, Mr Spurling will no longer remain in his role.

In a statement, the company said: "Following the completion of the investigation into accounting discrepancies at its Sandcity subsidiary, Darren Spurling, the managing director of Sandcity and a Blacks Leisure board director, has been dismissed."

There is no suggestion that Mr Spurling, who could not be contacted yesterday, has acted in any way illegally.

The announcement came as Blacks reported overall losses of £9.3m for the year to March 1, an improvement on the £13.8m deficit reported 12 months before.

But this still prompted chairman David Bernstein to promise "further radical change".

The group said its core Blacks and Millets outdoor divisions achieved a near three-fold rise in operating profits, but was offset by a poor year in boardwear, which trades through the Freespirit and O'Neill brands.

Part of its revival strategy will be to refresh many of its current stores, which it admitted had not seen significant change for a "considerable period of time".

New managers with backgrounds in businesses such as Marks and Spencer and Gap have been recruited to improve retail standards, in particular through the use of better window displays to boost footfall in stores.

Mr Bernstein said the group accepted results may not be immediate, particularly given the current economic turbulence.

The company added that it has made a solid start'' to the new financial year.