Warner Brothers stores look poised for sell-off

The UK chain of Warner Brothers Studio Stores is expected to change hands as part of a wider rationalisation programme by Enic, the investment vehicle that holds an 80 per cent stake in the shops.

Enic paid nearly £30m for the Warner Brothers stores in April 1998. But the 15 outlets are expected to be sold after Enic, which is backed by Bahamas-based billionaire Joe Lewis, completes its £75m takeover of Victor Chandler International, the offshore betting company.

Victor Chandler, VCI's chairman, who will take a seat on the Enic board once the deal is complete, said: "Mostly, our interests are very similar but there's bound to be some rationalisation after the deal goes through. For example, the Warner Brothers Stores do not really fit in with what we do."

Enic's interests are split into three separate divisions. The entertainment unit controls the Warner outlets and recently opened its first branded restaurant, called WB Stage 16, in Las Vegas. Enic also owns the rights to Warner Brothers' film library as well as its TV programming and cartoon library.

The two remaining divisions are the sports and media arms, whose assets include a stake in Rangers Football Club, ownership of Vicenza, the Italian club, and a holding in Autonomy, the internet software firm. Since August last year, Enic has also held a 25.1 per cent stake in VCI's internet operations.

In November, Enic announced its first full year results since converting from investment trust status. Revenues for the year ended 30 June 1999 were £44.5m but the group made a loss before tax of £4.1m.

The group's chairman, Howard Stanton, said then that trading conditions have been difficult, with rent reviews adding to the problems.