Green sells Freemans to Otto Versand for pounds 150m

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The Independent Online
PHILIP GREEN, the retail entrepreneur who took control of the struggling Sears group three months ago, completed his first big disposal yesterday when he agreed to sell the Freemans mail-order business to the German home shopping group, Otto Versand. The price was thought to be around pounds 150m.

Mr Green said he was now looking out for acquisitions and had the financial firepower for a pounds 1bn deal. "We are in the market to acquire," he said. "We'd buy anything if we thought it was a good deal. We could buy something for pounds 1bn. There are two or three things we've looked at. Nothing's too big, but lots of things are too small."

Mr Green, who received backing from the secretive Barclay brothers in his pounds 540m Sears bid, said he was looking for targets where he could utilise his group's management expertise, and that these would not necessarily be restricted to retailing.

The decision to sell Freemans to Otto Versand is not expected to run into problems with the competition authorities, although it does create a more powerful third force in the sector. Otto Versand already owns Grattan, and the Freemans deal would take its market share to 15 per cent, third behind Great Universal Stores with 24 per cent and Littlewoods with 16 per cent.

The sale price is a fraction of the pounds 375m Sears originally agreed with Littlewoods two years ago before the deal was blocked by the Government. But Freemans has fallen into losses since then, recording a first-half deficit of pounds 2.5m on sales of pounds 240m. Sales in the last full year were pounds 510m.

Otto Versand said: "Freemans is a very important strategic reinforcement of the global position of our mail-order group in one of the most important mail-order markets."

Otto Versand is a privately owned group based in Hamburg. It had sales of DM33bn (pounds 11.8bn) last year, of which about half were in Britain.

Since winning control of Sears, Mr Green has been reviewing capital expenditure levels and stock control. There have been some staff cuts at the head office near Oxford Street and at a Leicestershire centre.