Separately, Mr Green's group also announced that talks are nearing completion regarding a management buy-out of its Adams childrenswear chain.
Arcadia, which controls the Dorothy Perkins, Burton and Evans chains, is keen on adding Sears' Miss Selfridge, Wallis, Warehouse and Richards formats to its portfolio in a deal thought to worth around pounds 180m. The deal would give Arcadia around 9 per cent of the UK clothing market, second only to Marks & Spencer.
It would also enable Arcadia, led by John Hoerner, to shuffle Sears' group of stores with many of the struggling Richards shops likely to be re-branded. The sale of Adams is expected to fetch pounds 80m-pounds 90m with the deal backed by NatWest Ventures and led by managing director Michael Hobbs.
With the pounds 150m sale of Freemans to Otto Versand gaining clearance from the competition authorities yesterday, the break-up of the once mighty Sears group is almost complete. Mr Green paid pounds 548m for the group in January. If all the deals go though he will have recouped around pounds 420m so far with around pounds 150m of property interests remaining.
Mr Green, whose Sears deal has been backed by the Barclay Brothers, appeared happy with his five months work yesterday saying he was already looking for the next deal. "A billion pounds wouldn't stretch us," he said.
The City reaction to Arcadia's move was mixed. The shares rose 2p to 247.5p but some industry experts expressed surprise at the deal. Richard Hyman, of Verdict, the retail consultants said: "Wallis and Warehouse are good businesses but Arcadia is showing signs of having more balls in the air than it can realistically manage." One analyst added: "Is this deal covering up problems or even creating new ones. They don't seem to be managing what they have at the moment very well."
Arcadia reported interim profits of pounds 23m in April - more than halved from the previous year's pounds 50m as harsh trading conditions over Christmas hit sales.
The group, which was demerged from Burton last year, also announced it would cut jobs at its head office.