Co-op department stores to be sold

CO-OP department stores across the East of England are to be sold to a specialist retailer, it can be revealed today.

CO-OP department stores across the East of England are to be sold to a specialist retailer, it can be revealed today.

Talks are still ongoing with Vergo Retail Ltd to confirm the takeover of the Co-op's department and home stores business. The firm had considered closing four of its stores in the region and opened talks with Vergo about taking them on, however the talks were then extended to cover all the Co-op's department stores.

None of the 350 employees at the stores are expected to lose their jobs as these should be safe under The Transfer of Undertakings (Protection of Employment) Regulations, with completion planned for July 4 this year.

Richard Sampson, chief executive of the East of England Co-op, said the sale of the department stores mean the Society can concentrate on its profitable food stores across the region.

He said: “We now need to concentrate our efforts in other parts of our business where we have a strong presence. These stores represent less than six per cent of our total Society business and we will continue to operate more than 200 trading outlets and other services across East Anglia as well as actively seeking new ventures.”

Norrie Slater, divisional officer, Eastern division of union USDAW said “We understand and support the Society's strategy to concentrate on its other successful businesses in East Anglia and that this deal provides for around 350 employees to be transferred to the new operator on their existing terms and conditions.”

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The new owner will honour East of England Co-op members' dividend cheques that have recently been issued. Customers of the Co-op's department and home stores business have also been assured that orders awaiting delivery will be fulfilled as usual and any deposits are safe.

The Society will continue to provide member service departments within selected larger department stores, and members will be able to access dividend transactions as normal. In place of the Co-op dividend card, Vergo Retail operates a customer loyalty card called the Vergo VIP Card, which will enable a reward to be earned on qualifying purchases.

The online electrical store launched last year by the East of England Co-op will continue to operate.

Co-op statement:-

Richard Samson, chief executive of the East of England Co-op, said: “We are pleased that 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.

“It will also enable our customers and members to have the opportunity 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 an easy one to take, but the Co-operative Movement has generally moved away from operating Department Stores and no longer has the scale of purchasing power it once had in this area of business.

“The continuity of employment this deal provides for our colleagues in the stores concerned is very important and I know that they will continue to provide an excellent service to customers. I extend my sincere appreciation to them for their loyalty, support and hard work.”

Stores affected:-

Department Stores:

Carr Street, Ipswich and adjoining Food Hall

St Stephen's Street, Norwich

Market Place, Great Yarmouth

Long Wyre Street, Colchester

Station Road, Clacton-on-Sea


Hamilton Road, Felixstowe

Tavern Street, Stowmarket

Oxford Road, Clacton

Peartree Road, Stanway

Newland Street, Witham

Main Road, Dovercourt

Jewellery Department:

Eld Lane, Colchester

- The two small Home Stores in Weaver's Court, Halstead and at Sizewell Road, Leiston, will be incorporated within the Society's existing large supermarkets located alongside.

Prospective owners:-

Vergo Retail recently completed the purchase of Plymouth and South West Co-operative Society's Derrys department store in Plymouth and its homemaker stores in Launceston, Plympton, Kingsteignton and Exmouth.

Formed in 2007 it is headed by experienced retailer David Thompson, a former director of Mothercare, Habitat and BHS, and more recently director and shareholder of Mk One which was sold in 2004 for �55 million.

Stores currently trading within the group include Lewis's in Liverpool, Sunderland's Joplings department store and Robbs of Hexham, established in 1819.

Mr Thompson said: “We are very pleased to be expanding our group into the East of England with the acquisition of these stores which have real synergies with the current Vergo Retail portfolio. There is scope for significant further growth through the expansion of product ranges across all the stores and this is something we will be looking at, at an early stage.

“Customers and staff can be reassured by our considerable experience in successfully managing major regional department stores and our principles of offering good quality, great value for money and excellent customer service.

“All of our existing stores are important and longstanding features of retail within each of the towns or cities that they serve, this means that we understand the importance of the stores concerned and the important part they play in their local communities”.