Britain’s third biggest independent has agreed to sell its department store businesses in Norwich, Yarmouth, Colchester, Clacton and Ipswich, plus six home stores in Felixstowe, Stowmarket, Clacton, Stanway, Witham and Dovercourt — and a jewellery shop in Colchester — to Merseyside-based Vergo Retail for an undisclosed sum, but will retain ownership of all the sites.
Announcing the deal, which is expected to be finalised early next month, a society spokeswoman said the properties would be leased to Vergo. The agreement will protect the jobs of 350 employees at the stores concerned and within associated distribution depots.
Initially, East of England had discussions with Vergo regarding four stores threatened with closure. However the talks were extended to cover other stores within the society’s department and home stores business.
The only exceptions are two home stores in Halstead and Leiston, which will now be incorporated into existing adjacent large supermarkets.
East of England Chief Executive Richard Samson told the News: “This deal will secure the employment of our colleagues and maintain a strong retailing offer at the stores concerned. In the current economic climate, maintaining job security is a key priority. The deal will also enable our customers and members to be able to continue shopping in these strategic locations, which will all remain in the society’s ownership.
“The decision to move away from non-food stores after so many years has not been easy, but the Movement generally has moved away from operating department stores and no longer has the purchasing power it once had in this area of business.”
Added Mr Samson: “These stores represent less than six per cent of our total business and we will continue to operate more than 200 trading outlets and other services as well as actively seeking new ventures.”
Recently, Vergo — which was formed in 2007 and operates non-food stores around the country — completed the purchase of Plymouth & South West Co-op’s Derrys department store and its Homemaker stores in Launceston, Plympton, Kingsteignton and Exmouth.
The company is headed by David Thompson, who said: “We are very pleased to be expanding our group with the acquisition of these stores. There is scope for significant further growth through the expansion of product ranges across the stores and this is something we will be looking at.”
East of England said it will continue to provide member service departments within selected larger department stores and members will be able to access dividend transactions as normal. However purchases within the stores will no longer attract Co-op dividend.
Co-operative travel branches within the stores will continue to operate and the society say other concession departments are likely to remain in place.