M&S to sell Kings stores for $200m

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Marks & Spencer is close to finalising the sale of its Kings supermarkets business in the United States for around $200m (£130 million). The likely buyer is DiGiorgio, a US Group which controls the Bally casino empire.

The move is the latest step in the restructuring of the high-street group. It follows the announcement at the weekend that M&S Ventures, the e-commerce subsidiary set up last September, is to buy a stake in Splendour.com, which sells luxury lingerie at affordable prices over the internet.

Splendour.com was founded by Mark Pilkington, former chief executive of Gossard. Although hit by falling clothing sales, Marks & Spencer still sells more than a third of the £1.5bn-worth of underwear bought by Britons every year.

It was reported separately at the weekend that a big shake-up of head office operations is now under way, as part of a move towards splitting the group into seven business units as announced in December. But further large-scale redundancies are not expected. More than 400 head office staff were laid off last year, and nearly 300 from the stores.

Despite rumours in the past week that the Kings deal had collapsed over disagreements on price, it is thought the sale could be completed in the next few weeks. An M&S spokesman said: "At the moment we are in negotiations with one party and those talks are continuing. We would expect to make an announcement sooner rather than later."

M&S put Kings up for sale six months ago after deciding the business had limited scope for expansion. Kings operates 25 supermarkets, mainly in the New Jersey area and specialises in upmarket food such as ready-made meals. It recorded profits of £10m on sales of £245m in the last full year. DiGiorgio's White Rose food distribution division already handles some delivery work for Kings in parts of New Jersey.