East Anglia: Beales to acquired Westgate department stores
THE Anglia Regional Co-operative Society has agreed the sale of 19 stores, including eight in the East of England, to department stores chain Beales in a deal valued at �7.5million.
The sale will leave the society (ARCS) with just four department stores as it pursues a strategy to focus on food retailing, funerals and travel.
Most of the ARCS department stores trade under the Westgate identity, with the branches being acquired by Beales including those in Beccles, Diss, King’s Lynn, Lowestoft, Peterborough, Saffron Walden, St Neots and Wisbech.
Around 830 ARCS staff, mostly employed at the 19 stores changing hands but also including some based at the society’s Peterborough head office, will transfer to Beales, which is based in Bournemouth.
Beales is aiming to become a national brand and, while it had previously planned to grow at a rate of one or two stores a year, the ARCS deal will see its portfolio more than double in size to a total of 32 outlets.
Beales, which posted a reduced loss of �670,000 for the year to October 30, a 32% improvement on the previous year, said it hoped the acquisition would help it return to profitability within 18 months to two years.
ARCS is funding the deal through a combination of a �2.5m five-year loan to Beales and a subscription for �8.5m of unlisted preference shares.
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The loan will be repayable by Beales in six-monthly installments over the five-year term, after which ARCS will have a priority call on dividends through the preference shares.
ARCS is also helping to fund improvement work on some of the stores to help Beales return them to profitability. In the year to September 4, they recorded a pre-tax loss of �4.9m on gross sales of �61m.