Littlewoods targets 50 Bhs stores but rules out bid for Storehouse

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The Independent Online
LITTLEWOODS, THE retail and football pools group, is interested in buying up to 50 Bhs stores if Storehouse, the ailing retailer which owns the chain, is subjected to a break-up bid.

Barry Gibson, Littlewoods' chief executive, said that Littlewoods would not mount a bid for Storehouse itself but would be interested in cherry- picking Bhs branches if they became available. "We've taken a look at the whole portfolio and 30-50 could be of interest," Mr Gibson said. "The main draw for us would be stores within the M25 where we are currently under-represented."

Mr Gibson was speaking as Littlewoods, which has 112 high street stores, unveiled a 6 per cent increase in trading profits to pounds 38m for the six months to October but warned of weak current trading.

Littlewoods said clothing sales had been particularly badly hit by weak demand, with trading levels below those of last year. Mr Gibson said: "Its very, very tough out there, November was very difficult. December was better but people seem to be leaving it late for their Christmas shopping."

Hardest hit has been Littlewoods' traditional home shopping business, where orders are taken though an army of customer-agents rather than direct from catalogues. Sales slumped 7 per cent to pounds 440m and profits fell by 26 per cent to pounds 30m. The main high street stores continued to make a loss, though it was reduced from pounds 6m to pounds 1m this year.

The main improvements were shown by the 163 high street Index stores where losses reduced from pounds 11m to pounds 7m and the Index Extra catalogue, where profits trebled to pounds 4.8m. Littlewoods said it was pleased with the impact of its new store format which includes providing home shopping catalogues and Internet access in its shops.

Mr Gibson said sales from its Shop! television channel were growing "exponentially" but declined to give sales figures. Best-selling lines include fitness equipment and branded sportswear. The new catalogue cafe concept, where shoppers can browse through the chain's brochures while having a coffee is being extended to 90 stores. The Index Internet site has also been launched, though Mr Gibson admitted that the group's on-line sales were "diddly-squat at the moment".

Littlewoods said it has no plans to de-merge its football pools business, where sales have stabilised for the first time in five years and Mr Gibson also ruled out a bid for the Tote, saying the company will develop its Bet Direct service.

Group sales were flat at pounds 1m. Pre-tax profits fell to pounds 36m against the previous year's pounds 72m, though this figure was inflated by a pounds 34m VAT refund.