Sears to close 110 shoe shops

CITY DIARY

Sears, the Selfridges to British Shoe Corporation group, yesterday said it was closing 110 shoe shops that it regained control of following the collapse of Facia, the former empire of Sheffield businessman Stephen Hinchliffe and the subject of an investigation by the Serious Fraud Office.

Up to 1,000 staff will be made redundant as a result of the closures, which will be carried out by Price Waterhouse, administrators to the Facia footwear companies. Sears will then handle the sale of the properties.

The move comes hard on the heels of the closure of 90 shops earlier this summer with almost 1,000 job cuts. The latest shops to shut, within the next few months, will be mainly Freeman Hardy Willis together with a number of Curtess and Trueform outlets.

Sears regained control of 380 shops in May after the collapse of the Facia group which had originally bought them. More than 100 of the shops have been sold by Sears to various buyers including shoe groups Stylo and Stead & Simpson.

A spokeswoman for Sears said yesterday that the decision to close was an option that the company had been looking at for some time.

The group would look at ways of redeploying the staff, but she added: "It is unlikely all 2,000 jobs will be absorbed."

Chartered surveyor Healey & Baker has been instructed to sell the latest shops with vacant possession.

A big stock clearance is under way at the 110 shops which are scattered throughout the country.

Sears is due to report half-year results covering the period to the end of July next month. Speculation is growing in the City that hefty provisions to cover the losses on the shops reverting from the Facia group could push Sears into the red.

Sears has put in a claim for pounds 30m to accountancy firm KPMG, Facia's receiver. The group says it is owed that money for stock and other services provided to Mr Hinchliffe's empire.

That business collapsed after the Department of Trade and Industry instigated proceedings to have Mr Hinchliffe struck off as a director and after Sears put three of his companies into administration.

The SFO is understood to be looking into the circumstances surrounding Mr Hinchliffe's acquisitions of businesses, including whether all deals were properly recorded.

It is also examining loans from some Facia companies to other groups controlled by Mr Hinchliffe.