The suit retailer Moss Bros has sold off its chain of Cecil Gee stores after two decades of ownership to JD Sports in a deal worth £1.7m.
The divestment, which closed on Saturday, is part of Moss Bros chief executive Brian Brick's strategy to sell off peripheral parts of the business and "simplify the structure".
Mr Brick called the disposal a "significant milestone" in his strategy to make the company profitable. He said: "When I joined, the business was too complicated; we had to get the core business right." Yesterday's announcement follows the sale of the Hugo Boss franchise business announced earlier this year.
While like-for-like sales at Moss Bros were up 13.4 per cent for the 20 weeks to 18 June, the chief executive would not commit to the company's return to profit beyond saying it was "poised" to move back into the black.
Moss Bros can trace its history back 160 years. It merged with Cecil Gee in 1988, with the deal bringing prestigious stores including Beale & Inman and the Savoy Taylors Guild. Analysts at Altium Capital backed the decision to sell off the chain, saying it left Moss Bros a "much cleaner and more focused company" before adding the company was an "interesting recovery play, which should benefit from further self-help measures".
For the financial year to 29 January, Cecil Gee lost £500,000 but JD is confident it can turn the operation around. Peter Cowgill, the executive chairman of JD, said the takeover would be a "low-risk springboard for the development of a well-funded profitable premium-brand fashion chain". Cecil Gee will sit with JD's Scotts and Bank chains.
JD Sports also launched JD Sprinter after taking a 50.1 per cent stake in Spanish sports retailer Sprinter, it announced yesterday.
The remaining 49.9 per cent of shares in the group are owned equally by the Segarra family, who set the chain up in 1981, and the Bernad family, who have been investors in the chain for 15 years.
JD said the two acquisitions would expand its retail operation in Europe and increase its exposure "to a broader portfolio of premium brands".