Sears sells shoe chains to Stylo

Hush Puppy disposed of in pounds 19m deal as Saxone stores get new owne r

Sears has sold its Hush Puppy shoe chain to Stylo, the footwear retailer that owns the Barrett shoe shops, in a pounds 19m deal. Sears is also paying Stylo a pounds 8.75m reverse premium to take over 61 of the Saxone, Freeman Hardy Willis and Trueform stores that reverted to the company after the Facia retail empire collapsed into receivership in June. Sears said the two deals completed the reorganisation of its troubled footwear division.

Some 230 of the former Facia shops whose leases reverted to Facia remain in administration. Sears has appointed Healy & Baker to handle the sale.

Stylo chairman Arnold Ziff said he was delighted with the deals, which include 119 of the 126 Hush Puppy stores. They confirm the company as Britain's third-largest footwear retailer behind C&J Clark and Sears, with more than 1,000 outlets.

"Hush Puppy is an excellent brand and gets some excellent PR because the Chancellor of the Exchequer wears them," Mr Ziff said. He added that he had no plans to give Kenneth Clarke free pairs of his trademark brown suede shoes to keep up the good publicity. "If he gives me a penny off income tax I might give him a pair. But we don't tend to give shoes away. We have a saying in Yorkshire, 'What costs nowt's worth nowt'. "

Hush Puppy made profits of just pounds 300,000 on sales of around pounds 70m last year. Stylo recorded profits of pounds 3.9m on sales of pounds 175m last year. Stylo plans to refurbish the Saxone stores and revitalise the merchandise. It is planning to raise pounds 15m through a placing and open offer of one new voting share for every three held, priced at 110p per share. New banking facilities of pounds 15m have been arranged to help fund the integration. Mr Ziff said Saxone had great potential but had been allowed to drift under previous owners.

In a separate deal, Sears has sold the Hush Puppy wholesale business to a subsidiary of Wolverine Worldwide, which owns the Hush Puppy brand name.

Sears will not incur any additional provisions as a result of the deals. The pounds 8.75m reverse premium for the Saxone stores is included in the pounds 25m provision announced earlier this year.

Comment, page 17

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