Blog: ABF buys Littlewoods
Catherine Sleep | 12 July 2005
The expansion of a clothing retailer does not normally make the headlines of just-food.com; however, I thought it was worth mentioning the acquisition of Littlewoods Stores. The UK clothing retailer was bought by Associated British Foods (ABF), which already owns discount high street clothing chain Primark.
ABF bought Littlewoods from LW Finance Limited for around £409m. The acquisition comprises 120 Littlewoods stores covering high street locations across the UK but excludes the homeshopping activities of Littlewoods.
ABF, maker of Twinings Tea and Silver Spoon sugar, intends to retain around 40% of the current retail selling space of the store portfolio, which it will convert to Primark. The company expects to sell the remaining stores to other high street retailers.
The acquisition could be considered a bold move amid the current weak high-street retail environment, but Primark has been performing consistently well despite this, mainly due to its extremely low prices, and its strong performance looks set to continue.
Analysts also said the move was good for ABF as it would decrease the company's dependence on its sugar business ahead of changes to the EU sugar regime.
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