RETAILER JD Sports is in talks to buy rival First Sport's stores in a deal that could double the size of its branch network.

JD Sports, which has 150 stores, has begun discussions with Peterlee-based Blacks Leisure, about picking up its sport and fashion division.

The talks come days after larger rival JJB Sports shocked the City by announcing a proposed £42.3m acquisition of fashion chain TJ Hughes.

The Blacks division generates annual sales of about £163m and includes 187 First Sport stores and 26 AV branded shops.

However, sports and fashion margins have been hit by competition as profits for the six months to August 31 fell by nearly £1m to £4.3m.

A deal would allow Blacks to focus on its core outdoor business, which includes Millets, Free Spirit and 47 Famous Army Stores acquired last month.

Blacks has adopted an aggressive pricing policy in recent months to lure back shoppers after foot-and-mouth hit sales.

Yesterday, it issued a brief statement to confirm the talks with JD Sports but said that discussions were at an early stage.

JD Sports said it would look to fund the acquisition by increasing its debt levels rather than through equity.

The swoop for the Blacks unit fits in with the company's earlier stated strategy to increase its portfolio to about 350 stores.

The group, based in Heywood, Lancashire, had turnover of £204m in the year to March 31, with pre-tax profits at £16.5m.

JD Sports sells a range of branded leisure and sports clothes, including replica England football kits.