British retailer Marks & Spencer Plc sold US menswear chain Brooks Brothers Inc for $225 million cash on Friday, the last major step in a restructuring to focus on its core British business.
The sale, for a third of the price M&S paid in 1988, was made to privately held US speciality retailer Retail Brand Alliance Inc, headed by Claudio Del Vecchio, whose family controls Luxottica Spa, the owner of Ray Ban.
M&S announced plans to sell its US and European businesses in March in order to concentrate all its efforts on reviving sales and profits in Britain.
In the last two months it has sold its French and Spanish stores and the latest deal brings the restructuring programme nearer to completion, with the disposal of 27 US Kings Super Markets stores expected by Christmas.
M&S plans to share out the proceeds by returning £2 billion to shareholders by March 2002, by which time it hopes to have regulatory approval for the Brooks deal, which is bringing in less money than analysts had hoped.
Shares in M&S were unchanged at 334-1/2p, just below a 26-month high and valuing the company at £9.3bn ($13.1bn).
International director David Norgrove said while Brooks Brothers had “a wonderful American heritage and a committed workforce…it was not a good fit with Marks & Spencer’s core business or strategic priorities”.
UBS Warburg retail analyst Matthew Taylor said the market had been softened up for a low price, particularly after the attacks of September 11 that rattled stock markets.
“Clearly the business became more difficult after September 11 and quite a few potential buyers disappeared…It is pretty clear who got the best deal but for M&S it allows then to clear the decks and move on,” he said.
The benefits for M&S are in a more focused business which is able to concentrate on nurturing the first green shoots of recovery in the core UK business after three years of falling sales and profits.
“The big thing for M&S is can they get the clothing recovery off the gr