M&S sells Kings chain for £102m

MARKS & Spencer has finally found a buyer for its US grocery chain Kings Supermarkets in a move that signals its final exit from its non-franchised overseas operations.

Family-owned D'Agostino Supermarkets, which describes itself as 'New York's Grocer', is paying $160m (£102m) cash for the 29-strong chain, which has been in on-off sale talks for more than two years.

The New York retail world expected rival Gristede's Foods to buy the business, as M&S had granted it exclusive negotiator status. But Gristede's was unable to put the deal together before last week's deadline and D'Agostino wrapped it up over the weekend.

M&S spent $110m on Kings in 1988 but put it up for sale in 2000. It shelved the sale process after failing to find a buyer at the right price but put it back on the block in March 2001 when the decision was taken to pull out of all its overseas operations.

The sale marks a far better rate of return than that made on its Brooks Bros menswear retailer. M&S paid $750m for Brooks in 1988 but last November sold the venerable outfitter for only $225m.

Kings operates supermarkets in New Jersey and New York State. D'Agostino has 23 New York stores.

For the year to March 2002, Kings had operating profits of £12.6m compared with £11.9m and £11.1m for the two previous years. Its net assets were £71.1m but M&S management considered it was non-core to the UK retailing business.