Retail group Sears today unveiled details of its plans to spin-off its Selfridges department stores as a separate business.
One of the best known names in retailing, Selfridges operates the UK’s second largest department store on a landmark site in London’s Oxford Street and this year opens a second store in Manchester.
The demerger, announced earlier this year, will leave Sears focused on its high street clothing chains including Miss Selfridge, Wallis and Warehouse.
The company also confirmed its intention to demerge catalogue shopping business Freemans and carry out a share buy-back. But it is still refusing to give details on how much shareholders may get until later this year.
The closure and sell-off of the British Shoe Corporation is still expected to cost the £150m set aside for the purpose under ousted chief executive Liam Strong, the company said.
Today chairman Sir Bob Reid said Selfridges had a “bright future”. “A separate listing will, we believe, provide the opportunity to create further value,” he said.
However, the figures show Selfridges sales slipped 4% during the first four months of the year. Ongoing refurbishment of the Oxford Street shop’s ground floor had not helped, the company said.
Sears warned that the cost of opening the Manchester store in September and expanding back-office systems to cope would hit profits this year as well.
“Difficult trading conditions” also had an impact at Freemans and Sears Clothing, said Reid.
Just before the demerger Sears will “consolidate” its share base, issuing one Selfridges share and one new 250p Sears share for every 10 25p shares, reflecting the new, sharply scaled down company.
Shareholders will vote on the demerger plan at the annual meeting already set for July 17 and the demerger is scheduled to take place on July 20.
PA News 23/06/98
