Sears to abandon shoe business
Sears, the troubled retailer, is quitting the shoe business after 75 years with the loss of 550 jobs. The group is to close or sell all 775 shoe shops and take a pounds 150m charge. The fate of the company now rests on whether it can complete the sale of Freemans, its catalogue business, to Littlewoods, and float Selfridges. reports Sameena Ahmad.
Speaking as the group announced headline half-year losses of pounds 98m compared to pounds 3.5m profits last time, Sir Bob Reid, chairman, said yesterday that the company would demerge the Freemans catalogue business if the sale to Littlewoods was blocked by Margaret Beckett, President of the Board of Trade. Freemans' book value is around pounds 200m. However, Sir Bob - who expects a decision from the Government on the sale no later than the end of November - said he was confident that the sale would be approved: "I don't see why it will be blocked. The merger of the two would create a strong force in retailing able to compete against the likes of GUS. To disrupt that doesn't make sense."
Sir Bob said that plans to spin off the Selfridges department store were on track for mid 1998, and that the business could be worth pounds 800m. He said that, given the break up of the group, he had decided not to appoint a chief executive to replace Liam Strong who was ousted earlier this year. "We have chief executives for both Selfridges and the clothing business. There is no need for someone to sit on top of them. Since Liam has gone I have taken on a lot of his responsibilities." Sir Bob said he would stay on with the group for around a year after the demerger of Selfridges, but then planned to step down.
Investors had been braced for yesterday's news, and the company's already depressed share price eased 0.5p to 58p.
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