Peter Black Holdings has entered into a conditional agreement to buy the Marks & Spencer footwear division of Fii for a total consideration of £5.15 million. The first £3.75 million will be paid on completion from existing resources, with the remainder in stages up to January 31 2000.

The agreement is conditional on approval by Fii's shareholders, but subject to that is expected to be completed on May 31. Fii designs and sources footwear for supply to M&S. Peter Black will take over supply contracts with overseas manufacturers and the current order book, estimated to be worth around £12 million. The merged group will supply a third of M&S's women's shoes and between 50 and 60 per cent of men's. At the moment it supplies about 20 per cent of women's and a third of men's.

Peter Black chief executive Stephen Lister says Fii had a relatively small turnover of £12 million, yet still had to maintain overseas infrastructure and quality checks. "We will simply bolt on their turnover, but we already have our own infrastructure. That's why it is such a good deal," he says.

Chairman Gordon Black says: "This is a very positive move for Peter Black. The commercial logic is self-evident, and the deal is immediately earnings-enhancing. We have a proven overseas sourcing infrastructure in place, and the additional sales volume can be added with very little increase in the overhead base. The acquisition is in line with the current move towards supply base consolidation. Both the customer and supplier benefit from the reduction in costly duplication of effort as regards product development and communication. In addition, extra volume creates the opportunity to improve the value of the product offer."

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.