Retailer Steinhoff on Friday said it will sell its loss-making UK furniture business Blue Group to specialist European retailer Alteri Investors.
The amount of the transaction was not disclosed in the notice to shareholders. Steinhoff is currently battling a debt burden of almost €9bn (R146bn), and is selling some of its assets to stay afloat.
Blue Group owns UK-based furniture companies Harveys Furniture and Bensons for Beds and trades from 269 stores. It also has four manufacturing sites, five distribution centres in the UK and employs 2 700 people. It has an annual turnover of over £500m (about R9.8bn), the notice read.
The acquisition by Alteri Investors is expected to return the group to profitability.
"With the backing of new owners, management will be able to drive continued improvement in the performance of the group, having already made progress with a series of initiatives launched in 2018.
"Alteri Investors is fully supportive of the management team,vand will work with them to develop the strategy to transform the group's profitability," the notice read.
"The sale of Blue Group is the latest in a series of planned divestments by Steinhoff as we continue with our announced strategy of simplifying the group's portfolio and deleveraging our balance sheet," said Steinhoff group CEO Louis du Preez.
Commenting on the transaction, which is still subject to regulatory approval, Blue Group CEO Mark Jackson said Alteri will help "turbo-charge" plans to drive the retailer's performance.