Marks & Spencer pays pounds 193m for Littlewoods' prime stores

Marks & Spencer made its first big acquisition in more than a decade yesterday when it agreed to pay pounds 192.5m for 19 Littlewoods stores. The deal is the largest by M&S since the purchase of Brooks Brothers in the United States in the 1980s. It is thought to be the company's largest ever UK transaction.

Announcing the deal to shareholders at the company's annual meeting in central London yesterday, M&S's chairman, Sir Richard Greenbury, said it was "an outstanding opportunity" which underlined the company's continued confidence in the future of the high street.

"We expect to start fitting out the stores next February and we'll be ready to open them progressively through the year," he said. He added that the stores were "all in places where we have been seeking extra footage for years". The extra 600,000 sq ft of space would be in addition to the 1.4 million sq ft expansion already planned over the next three years, Sir Richard said.

The deal will be completed next February and the stores will be re-branded under the Marks & Spencer name. The 19 branches are some of Littlewoods largest, meaning some will be refurbished to take a full M&S offer. Others will be converted to food halls, home furnishings stores or outlets specialising in menswear or womenswear.

Up to 1,800 Littlewoods jobs will be affected though 80 per cent of these are part time. The redundancies will be Littlewoods' responsibility, with analysts expecting a cost of around pounds 10m excluding stock write-offs. However, M&S said it would create an unspecified number of jobs as a result as the deal.

M&S put in a bid to Littlewoods right at the beginning of the sale process in March and beat off rival offers from Boots and Kingfisher. Sean Eddie of NatWest Securities said: "It's a good deal, but fully priced."

The sale of the stores is part of a revised Littlewoods strategy by the group's chairman, James Ross, after plans to sell the entire high street chain fell through. Though the company was clearly pleased at the price the sites had fetched, analysts said the company had sold its best stores, leaving the prospects for the remainder uncertain.

Mr Ross shrugged off such criticisms yesterday, saying: "The sale of these stores realises significant value from a small group of our larger properties. The board of Littlewoods was always clear that it would not sell the stores business if it could realise greater value from revitalising the businesses and reconfiguring the property portfolio."

The 19 stores are scattered across the country in locations such as Bath, Belfast, Cardiff, Derby and Chester. The flagship store at London's Marble Arch is also included.

Littlewoods is expected to sell another four or five stores and close several others leaving it with a portfolio of around 100. These will be re-launched with a new format focusing more on womenswear and the Berkertex brand. In time, all the Littlewoods stores may be rebranded under the Berkertex name.

The announcement from M&S was combined with an update on current trading. This showed that clothing sales in the UK had increased by nearly 10 per cent in the first quarter led by strong sales of womenswear. Home furnishing sales were 16 per cent ahead. In food, sales in June and July are running at 3.5 per cent above last year.

At the shareholders meeting Sir Richard was forced to defend the appointment of David Sieff as a non-executive director of the company. Mr Sieff is the son of former M&S chairman, Lord Sieff. He stepped down from an executive role in April but was appointed as a non-executive.

Sir Richard denied the move was contrary to guidelines on corporate governance. "I don't accept the Cadbury recommendations in respect of the very special circumstances associated with David Sieff." He added: "The name Sieff in Marks & Spencer means a great deal."

Start your day with The Independent, sign up for daily news emails
  • 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

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Guru Careers: .NET Developer / Web Developer

£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
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