Hinchliffe buys Sears' ailing shoe stores
Tuesday 06 February 1996
Stephen Hinchliffe's Facia group became one of Britain's top 10 high street retailers yesterday when the company bought the ailing Saxone and Curtess shoe shops from Sears, the Selfridges and Freemans retailer.
Facia now has 860 branches in a dozen formats including Salisbury's, Sock Shop, Contessa and Oakland Menswear. In terms of store numbers Facia is fast catching up Boots, Kingfisher, Burton and Sears, which still has about 1,850 shops.
Though no price was disclosed for yesterday's deal, it is thought Mr Hinchliffe paid around pounds 3m-pounds 4m for the 134 branches. Sears will be taking a loss on the disposal but this has already been provided for in the pounds 65m provision announced last year.
The sale will involve 290 redundancies at Sears', British Shoe subsidiary including 90 at the head office in Leicester. Up to 200 more will go from the logistics division and from the closure of some of the small Saxone and Curtess concessions. Sears says the sale of around pounds 10m of assets will generate around pounds 12m in cash flow.
Liam Strong, Sears' Chief executive, said the sale completed the disposal of the group's non-core shoe chains and would enable it to concentrate on its growing formats such as Shoe Express and Shoe City. However, the future of Hush Puppy and Cable & Co formats is under review and it is possible that these too may be sold.
Facia has spent the last 18 months gathering up underperforming retail chains that have been offloaded by larger parents. Last August it bought the Freeman Hardy Willis, Manfield and Trueform shoe shops from Sears.
Mr Hinchliffe described Saxone and Curtess as "very strong brands" which "dovetail logically" with Facia's existing formats.
Facia hopes to move both chains upmarket and improve the quality and fashion element of the shoes. It also hopes to add handbags and possibly socks to some outlets. However, retail analysts feel Mr Hinchliffe will face a tough task to turn around under-performing stores that were barely profitable.
"It is a high risk strategy," said Clive Vaughan of Verdict Research. John Richards of NatWest Securities described Saxone and Curtess as "discredited, tired brands" that would not respond easily to resuscitation. Another analyst said that if Sears could not make Saxone and Curtess work with its huge economies of scale, Facia seemed certain to struggle.
Facia claims to have reduced costs by pounds 10m in the businesses bought so far. This year it will move its head office and distribution locations.
It has been testing a new format of Salisbury's, the luggage stores. The Oakland menswear chain has been moved upmarket with higher quality, higher priced clothing. The Sock Shop chain is also being refurbished. Facia's plan is to use its Red or Dead design company, acquired in January last year, to improve the quality of merchandise.
Facia has not reported any trading figures since it formed in August 1994, when it bought the Salisbury's chain from Signet. Its year end was in January but there has been no indication as to whether the company made a profit or a loss. It is thought that Mr Hinchliffe, who also owns a 15 per cent stake in Sheffield United football club, is grooming Facia for a stock market float.
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