Group to sell or close 36 department stores

THE Co-operative Group has announced plans to close or sell all of its 36 department stores by February 2007. Ten stores – seven of them in Scotland –...

THE Co-operative Group has announced plans to close or sell all of its 36 department stores by February 2007.
Ten stores – seven of them in Scotland – will be closed in February next year, but many of the remaining 26 could be sold as going concerns to Peterborough-based Anglia Co-op, which has already acquired some department stores from United Co-operatives.
Negotiations with Anglia are still ongoing and a decision on which outlets the society will acquire is expected in the next fortnight.
The initial phase – affecting Group department stores in Alexandria, Ashington, Dumbarton, Dunoon, Falkirk, Fraserburgh, Gillingham, Hatfield, Helensburgh and Kirkintilloch – will mean the loss of 71 full-time jobs and 70 part-time positions.
The remaining 26 stores employ 491 full-time staff and 379 part-timers, but it is hoped many of these jobs will be secure as a result of the interest by Anglia and other possible buyers.
However a Group statement makes it clear that any stores unsold by February 2007 will be closed as a matter of course.
The stores in this batch are at Alloa, Amble, Ashford, Berwick, Bishop Auckland, Bletchley, Blyth, Brighton, Chatham, Chester-le-Street, Dartford, East Kilbride, Eastbourne, Eltham, Gateshead, Glenrothes, Greenock, Hoddesden, Leighton Buzzard, Mansfield, Newcastle, Paisley, Sittingbourne, Skegness, Strood and Welwyn Garden City.
The Group also plans to sell its television rental business, employing 56 people, as part of the programme.
The Group&#039s Deputy Chief Executive Paul Hewitt said the decision to exit the department store sector had been taken "with much regret" by the Group&#039s Board and only after a detailed strategic review of the department store business, which last year, lost over &#163 4 million and has a history of poor performance.
"The review concluded that a complete exit from the sector, disposal of the stores and the re-investment of the proceeds into our core businesses was the only commercial option," he explained.
"This was a very difficult decision to make, but at the end of the day, a necessary one. We operate in fiercely competitive markets and this business is a continuing major drain on our resources.
"We will be closing the 10 biggest loss makers next February and we hope to be able to find buyers for as many of the remaining stores as we can. We will do everything we can to help those left without jobs find alternative employment."
The Group is currently trialling a new non-food retail format known as Home Store in Perth and Tunbridge Wells and if successful will launch a further two pilot stores next year. These outlets are unaffected by the decision.
The Group says it will also continue to develop E-Store, a joint venture with United Co-operatives which sells electrical goods and beds on the internet.

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