Hanson buys ailing store chain

NIGEL COPE

Hanson, the industrial conglomerate, made a surprise move on to the high street yesterday when it acquired the loss-making Powerhouse chain of electrical stores.

Hanson already owned a 36 per cent stake in Powerhouse through its acquisition of Eastern Electricity in September. Yesterday it bought the remainder from its two joint-venture partners, Midlands and Southern Electricity.

Though the price was not disclosed, it is thought that Hanson may have been paid to take the chain off its partners' hands. Powerhouse has proved a disastrous experiment by its three owners, losing pounds 7m last year and pounds 5m in the previous year.

Eastern, Southern and Midland have already made pounds 140m of provisions to cover the costs of the disposal. The chain was put up for sale in May.

Hanson said yesterday: "This is not the start of a Hanson retail arm. It is simply a management exercise."

It is thought that Hanson has taken control of the stores to reduce losses and sell them on at a profit. The company declined to comment on possible store closures and redundancies ahead of a strategic review.

Powerhouse has 320 stores, most of which are loss-making high street sites. The company has been struggling against fierce competition from rivals such as Dixons and Comet. Most of the regional electricity companies have now sold their retail operations, with only Norweb and Scottish Power still expanding.