June 16, 2009 / 8:19 AM / 10 years ago

UPDATE 1-Kesa to sell Swiss business as looks to stem losses

* In talks with FUST to sell business for 11.4 mln pounds

* Says sale will not result in a loss

* New CEO to outline plans for group on June 24

(Adds detail)

LONDON, June 16 (Reuters) - Kesa Electricals Plc KESA.L, Europe’s third-biggest electrical goods retailer, said on Tuesday it was close to selling its loss-making Swiss operation as its new chief executive moves to clean up its portfolio of businesses. The firm said it was in exclusive talks with Swiss electrical retailing chain FUST regarding the sale of its local business for about 11.4 million pounds ($18.6 million).

Kesa said the sale will not result in a loss for the group.

It said negotiations with FUST will include obtaining several approvals which are likely to be completed in the coming weeks.

Thierry Falque-Pierrotin succeeded Jean-Noel Labroue as Kesa’s CEO in January and is due to outline his plans for the group when it publishes full-year results on June 24.

Analysts said the planned disposal of the Swiss business shows he is keen to address Kesa’s loss-making operations.

The group’s bigger loss-makers are businesses in Spain, Italy and Turkey.

“The new CEO has not hung around in his attempts to take out losses from the current profit and loss (account) profile,” said Matthew McEachran, retail analyst at Singer Capital Markets in a research note.

“If this is an indication of things to come, the shares should perform well despite the relatively small scale, as hopes of further loss elimination build.”

Last month Kesa reported sales declining faster in the first four months of 2009 than at the end of last year but said annual profit met expectations. [ID:nLC37767]

Shares in Kesa, which have lost a third of their value over the last year, were down 4.25 pence at 116 pence at 0809 GMT, valuing the business at about 613 million pounds.

Reporting by James Davey, editing by Mark Potter

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