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John Menzies in 'pounds 50m management buyout'

Nigel Cope
Thursday 22 January 1998 20:02 EST
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The John Menzies retail chain is expected to be sold to its management, it emerged yesterday after the group announced plans to abandon its high street interests and concentrate on its news distribution and delivery interests. The 232 John Menzies stores, which specialise in news, confectionery, books and greeting cards are expected to be sold to a venture capital- backed management group valuing the chain at around pounds 50m. The management team is likely to be led by Steve Robinson, the chain's managing director and financed by Alchemy Partners, the venture capital group. The deal is expected to be completed within the next few days.

The group will buy all the shops as a going concern and plans to retain the Menzies name. This should minimise store closures and job losses among the 3,500 staff. Alchemy would not comment on a possible deal yesterday only saying "we would be interested". The Menzies stores have their stronghold in Scotland and the north and make a modest profit of around pounds 3m.

As part of its decision to pull out of retailing, John Menzies plans to demerge its Early Learning Centre toy shops. The chain is heavily loss-making and has been a victim of ferocious competition in the toy market.

John Menzies also revealed a dramatic fall in half year profits, from pounds 2.6m to just pounds 200,000 which were only rescued by the group's news distribution and baggage handling operations.

The shares closed down 12.5 to 351.5p.

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