Lease snag delays Signet jewellery sale

The long-awaited sale of Signet's two UK jewellery businesses, H Samuel and Ernest Jones, to the venture capital group Apax Partners has been delayed because of complex negotiations over property leases on the chains' more than 600 shops. Details of a sale had been expected about now but completion has been put on hold until a formula can be agreed to safeguard Signet from any future liability regarding the leases.

The issue was given added urgency recently when Sears closed 200 shoe shops returned to it after the collapse of Facia, the company to which it had previously sold them. Under British property law, responsibility for the leases on buildings reverts to the original lessee in the event of a default by a party to which they have subsequently been assigned.

Signet is determined not to face any similar liability when it finally pulls out of UK retailing as it announced it planned to do last January. The proposed pounds 280m sale of H Samuel and Ernest Jones, forced on the company by crippling debts, will reduce Signet to its American chain Sterling and a move of headquarters to the US is expected to follow the deal.

The rules on lease assignments have come in for heavy criticism in recent years. Thanks to the unusually long leases on British commercial properties of up to 25 years, compared to under ten in many continental markets, businesses can find themselves responsible for leases on properties they vacated years previously.

James McAdam, chairman of Signet, remained tight-lipped on the sale yesterday, saying only that "discussions have taken place with a number of interested parties and are still continuing with one potential purchaser".

He was speaking as the group, formerly known as Ratners, announced a two-thirds reduction in its first half loss after a 7 per cent increase in like for like sales. Ernest Jones gave the strongest showing, with an 18 per cent improvement in comparable turnover.

At the operating level Signet reported its first interim profit since 1990, reversing a pounds 2.9m loss into a pounds 10m profit. After interest payments on the group's pounds 306m debt mountain, the pre-tax loss emerged at pounds 6m compared with a pounds 21.3m deficit a year ago. There was no dividend on either Signet's preference or ordinary shares.

Mr McAdam said: "The group has been trading well and the much improved results for the half year are encouraging. We now need to maintain the good progress and prepare for the all important Thanksgiving and Christmas trading periods."

Still unclear is the possible involvement after an Apax acquisition of rival jeweller Goldsmiths, which has made no secret of merging its operations with Ernest Jones believing it could squeeze sizeable rationalisation benefits out of a deal.

In recent weeks attention has shifted to a possible management buyout of Ernest Jones and H Samuel, backed by Apax. A plan for Apax to buy a large stake in Goldsmiths and then merge its business with Ernest Jones appears to have been abandoned.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions