The new chief executive of Blacks Leisure suspended one of his main boardroom directors yesterday and was forced to issue a profits warning after discovering a £2 million black hole in the accounts.

Neil Gillis, who took over at the UK’s largest outdoor clothing group in December, said that Darren Spurling would be suspended pending an investigation into “significant discrepancies” in the books at O’Neill, the group’s surfwear brand.

A team reviewing the Sandcity subsidiary that runs O’Neill uncovered the black hole at the weekend. Mr Gillis, who once gave a conference in the nude to highlight the risks of being unprepared, said that margins in the O’Neill business had been overstated in the past two years.

He told The Times: “Cash has not left the business, and no one appears to have benefited but the margins were overstated. Who knows what the motives were.”

The discovery means that profits at Blacks Leisure will be £1 million lower than expected in both the current financial year and in 2008-09.

Analysts believe that the group may report pretax profits of only £1 million this year.

Mr Gillis insisted that the setback would not derail his turnaround plans. He added that Mike Ashley, the Sports Direct owner and 29.9 per cent shareholder, was “supportive” despite widespread speculation that he could react angrily. The former management of Blacks Leisure pulled the planned sale of Freespirit, its other boarding brand, last year after Mr Ashley spoke out against the move.

Mr Gillis said: “I rang one of [Mike Ashley’s] colleagues to talk through the announcement and he was very supportive and very positive. That’s the message that was fed back to us – it was supportive.” The shares closed unchanged at 131p after falling earlier in the day.

Mr Gillis refused to comment on the future of Keith Fleming, who has been finance director at Blacks for the past two years and was acting chief executive until December. He said: “I’m looking at the group in a lot of detail, I’m turning over every stone you could find. This is irritating, it’s quite annoying, but in the business sense of things it’s not substantial.”

Mr Spurling, who is 42 next week, joined the Blacks Leisure board six years ago when Blacks bought Sandcity. He has been in charge of the O’Neill brand since 1994.

Sales across both O’Neill and Freespirit plunged by 10.8 per cent over Christmas and New Year. Mr Spurling was unavailable for comment.

Mr Gillis, the former chief executive of Esporta Health Clubs, had been reviewing Sandcity with a view to closing its head office in Washington, Tyne & Wear and merging the brand with Blacks’s Freespirit operation.

Blacks confirmed yesterday that the standalone Sandcity site was likely to close with the possible loss of 59 jobs.

BDO Stoy Hayward, Blacks’s auditors, will be carrying out an investigation to examine the nature and scale of the accounting discrepancies at the subsidiary.

Mr Gillis is desperately trying to win back customers by “reenergising” the Blacks Leisure and Millets store chains. Blacks Leisure is being repositioned as an outdoor fashion brand.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive