Co-op announces 3,000 job losses and pounds 149m sell-off
Tuesday 27 April 1999
In two separate deals netting a total of pounds 149m, CRS is selling its 40 Living department stores to the privately owned house builder Miller Developments. Ten of these are being sold on to Primark, the discount clothing retailer owned by Associated British Foods.
The CRS is also selling its 10 out of town Homeworld stores to Kingfisher for pounds 80m. Kingfisher plans to convert four of the stores to its new Big W format, a hypermarket version of Woolworths. The first Big W is due to open near Edinburgh in June and will include a Burger King restaurant and Peacocks clothing range in addition to the usual Woolworths merchandise.
If Kingfisher's pounds 18bn merger with Asda goes through, the stores could also include Asda's George range of clothing. A further four Homeworld outlets will be converted to the B&Q Warehouse format.
CRS said it had told the 3,000 staff of their redundancy terms, but hoped some might be re-employed by the stores' new owners. The shops will continue to trade under their existing formats for three months.
Andy Meehan, who joined the CRS as chief executive from Storehouse last year, said the disposals would allow the group to "stop the source of our heaviest losses, regain control of our destiny and facilitate our drive into the convenience food sector where we have already started to be highly successful".
The sales leave CRS with its 472 supermarkets and 174 funeral parlours and interests in property and car retailing. The supermarket business has sales of pounds 1.2bn but loses money due to inefficiencies and poor buying terms. The CRS moved to improve these terms by joining CRTG, a Co-op buying group. This is expected to yield millions of pounds in cost savings.
The CRS also announced yesterday that Peter Rowbotham has stepped down as chairman after a disagreement on strategy. He had opposed the disposals and announced his decision to go at the weekend. "My decision draws a line under the recent upheavals, but with the decision to sell non-food and the introduction of a new senior management team, my departure is timely. It's time to look forward to a whole new society."
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