Barclay brothers buy Littlewoods for £750m

The Moores family, one of Britain's most colourful business dynasties, bowed out of the retail trade yesterday after agreeing to sell the Littlewoods retail empire to the Barclays Brothers for £750m.

The deal, which includes the privately owned group's high street stores and its mail order division, ends the family's 79-year link to the business that was founded by Sir John Moores in 1923.

The secretive Barclay twins – Sir David and Sir Frederick – whose varied interests span newspapers such as The Scotsman and London's Ritz Hotel, have pledged to keep the Littlewoods name and its existing management team, down to the group's 22,000 employees. The company will continue to be based in Liverpool.

In a statement accompanying the announcement, the Moores family said they it was "a wrench to part from the company" but they were "delighted" with Littlewoods' new owners who they felt would "share our family values". The shares are controlled by 40 members of the Liverpool-based Moores family, all direct descendants of Sir John, who died in 1993, aged 97.

The deal marks the Barclays brothers' second foray into retail after their backing for Philip Green's takeover of the Sears retail chain in the Nineties. Sears, which included the Freemans mail order business and Miss Selfridge, was later broken up and sold, prompting City speculation that the same fate would befall the Littlewoods empire.

The Barclays, who are directly investing £100m, in LW Investments Limited, the company formed to make the offer, have secured binding commitment to accept the bid from 70 per cent of the Moores family. A further 20 per cent have indicated that they intend to follow suit.

The duo first approached Littlewoods about a deal in January, five months before the group announced that it had received a number of enquiries about selling its high street stores business, which started in 1937 from one site in Blackpool. At the time, the family had not decided that it wanted to sell up.

David Simons, Littlewoods' chairman, said that following three months of discussions with the shareholders, they concluded that "they wanted to diversify their interests and have some liquidity" from their investments, most of which have been held in trust. It is not which family member stands to make the most from the deal.

The family, which is renowned for the colourful feuds that have speckled the retailer's history, has not had any role in managing the business since 1996.

Mr Simons said that after a strategic review the Littlewoods board had concluded that the mail order business should be run separately from the high street stores. "The Barclay brothers will take a look at that strategy and conclude for themselves whether they want to continue with the high street stores or not," Mr Simons said, adding that a sale was "certainly an option".

It is not known who was behind the approaches for the group's 179 high street stores, which include the 60 Index catalogue shops. The business has struggled to keep pace with competition from international retailers such as Hennes & Mauritz and Inditex's Zara and made only "modest profits" on sales of £704m last year.

The freehold property is believed to be worth £250m. Littlewoods returned to the black last year with a pre-tax profit of £34.5m. It expects to make about £83m pre-tax profits in the year to end April., which puts the sale price on a slightly higher exit multiple than Philip Green paid for Arcadia last month.