Beales chief executive Tony Brown has vowed the department store chain will return to profit within 18 months following the acquisition of 19 stores from Anglia Regional Co-operative Society (ARCS).
Brown said the £7.5m deal for the ARCS stores would allow the business to ramp up its own-label offer by amalgamating ranges, consolidating the supply chain and negotiating better margins based on increased volumes.
Upon completion of the deal, 830 staff and some head office staff will transfer to Beales. Brown would not comment on possible redundancies.
ARCS has offloaded its department store business to focus on its non-food operations, including travel, funeral services and furniture. It is understood ARCS has made wider losses than Beales, which narrowed losses before tax by 32% to £670,000 in the year to October 30.
The deal – which means Beales will have a total of 32 stores – is to be financed by ARCS, which will keep a significant stake in the business with preference shares and by operating four furniture concessions in selected stores.
Alongside fashion and furniture, some stores will carry travel and opticians services. A joint transactional website will be launched at a later date.
Beales will spend £1.2m in the first year refitting the Westgate department stores, many of which need a significant overhaul. The deal gives the department store chain a stronghold in market towns of Chipping Norton, King’s Lynn and Skipton.