Sears to scrap Freemans float and sell off pounds 150m properties

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The Independent Online
SEARS, the troubled retail group, will today announce property sales worth up to pounds 150m and the scrapping of the demerger of Freemans, its mail-order catalogue, in a bid to prop its flagging share price.

The owner of the Miss Selfridge womenswear and Adam's childrenswear chain is likely to signal that its SearsCard store card business is up for sale.

Sir Bob Reid, the chairman, will use today's interim results to outline a shift in company strategy following the demerger of Selfridges, the Oxford Street store, earlier this year.

The restructuring is aimed at rebuilding investor confidence in the retailer. Shares in Sears have fallen to a near all-time low as concerns over strategy and current trading triggered a wave of selling.

The key part of the new strategy will be the sale of a large chunk of the company's property portfolio, worth around pounds 185m. Sears owns the freeholds of most of its stores and has a stake in several retail major city developments.

Sears has always declined to give a detailed breakdown of its properties, but analysts estimate that around half the portfolio is in prime sites in the high street, with the rest in out-of-town developments.

Last yea, Sears Properties posted a trading profit of pounds 11.1m, with development profits of pounds 10.4m and rental income of pounds 4m. In a recent note on Sears, broker Dresdner Kleinwort Benson said a sale of the portfolio could fetch pounds 150m.

Possible buyers will include British Land, the developer that has been steadily building a stake in Selfridges with a view to unlocking the value of the Oxford Street store site.

The company could also look at selling its card business, which provides loyalty card services to group stores and external clients. The business has 1.4 million accounts and could raise up to pounds 115m, say analysts.

However, Sir Bob is expected to confirm that the flotation of Freemans, the mail-order catalogue, will be delayed becaused of stock market conditions. Sears has been looking at spinning off Freemans since its pounds 358m sale to Littlewoods was blocked last year. Sources close to the company said that Freemans will remain in the group until a trade buyer steps forward with a good offer.

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