The business, which turns over pounds 128m from 350 stores, has been sold to a management buyout group, backed by Hambro European Ventures, for a nominal pounds 1.
Liam Strong, chief executive of Sears, said the cost was 'significantly cheaper' than closing down the business, which made trading losses of pounds 9m in its last financial year and pounds 5.3m in the three months to May.
Four managers, led by David Carter-Johnson, are investing pounds 350,000 for 60 per cent of the equity, half of which will later be offered to staff. Hambro is thought to be injecting pounds 5m for its 40 per cent stake. The chairman is Geoffrey Taylor, former chief executive of Midland Bank.
The Your Price facia will be axed and its 90 shops converted to the Fosters name. They will concentrate on casual wear, discontinuing formal clothing.
Sears was able to sell the disastrous business by agreeing to fund redundancy payments in the head office in Solihull, invest pounds 3.5m in preference shares in the buyout (which it has written off at once) and pay other liabilities, bringing the total cash outlay to pounds 18m.
This, together with the pounds 5.5m trading loss of the last four months, and other write-offs led to an extraordinary cost of pounds 40m. Also, pounds 42m of goodwill, which Sears wrote off to reserves in 1985 when it bought Fosters Group, is to be written off through the profit and loss account but recredited to reserves, under new accounting rules.
The total pounds 82m extraordinary loss will be included in the interim accounts, due next week. Sears retains the freeholds and long leaseholds.
The City welcomed the disposal, marking Sears shares 5p higher to 69p.
Some of the 300 head-office and distribution staff were made redundant yesterday. More will follow today, but Mr Carter-Johnson declined to say how many.
Last year Sears shed its Hornes and Dormie menswear businesses. It is now happy with its remaining businesses, which span Dolcis shoeshops to Adams children's wear shops. Selfridges was 'not for sale', Mr Strong said.Reuse content