X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LONDON-Retailer Marks & Spencer (M&S) has dropped plans to sell its North American supermarkets arm Kings after failing to attract the right price for the business.

M&S decided two years ago to dispose of the 27-store American chain as part of a strategy to refocus on its core domestic market. But chief executive Roger Holmes announced today that discussions to sell Kings, which generated turnover of £290.1 million ($467.5 million) in the year to 31 March, were off.

He said: “In the current US climate it has not been possible for interested parties to raise sufficient funds to purchase Kings at what we perceive to be a fair price.” Holmes added that Kings remained outside of the blue-chip company’s core strategy, but that it would still look to maximise its value by working with the division’s senior managers to improve its financial performance.

When Kings was put up for sale in 2001, analysts predicted that the operation could fetch in the region of £185 million ($298 million) and could go some way towards improving the fortunes of the ailing retailer which had become one of the biggest brands in UK retailing.

The strategy, which at the time was expected to cost more than 4,000 jobs, also included the closure of 38 stores on the Continent and the shutting of a mail order catalogue business in the UK. But since then fortunes have dramatically improved at M&S and the company has no need for a fire-sale of Kings.

The Kings food chain, which focuses on the upper end of the market, was founded in 1936 by the Bildner family and subsequently acquired by M&S in 1988. The business is based in Parsippanny, New Jersey and operates stores ranging in size from 6,000 to 27,000 square feet.

But Kings has struggled in the difficult retail climate, with turnover down from the £328.7 million ($529.5 million) seen in 2002 and operating profits at £7.9 million ($12.7 million) compared with the £12.6 millions ($20.3 million) seen a year earlier.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.