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Shoezone and Stylo Group eye Shoefayre

Stylo Group and value rival Shoezone are circling footwear chain Shoefayre, according to insiders.

The business has been put up for sale by owner The Co-operative Group with a price tag understood to be £2 million.

Management expect a deal to be finalised in two months and a mooted MBO has been scrapped, a source said. He added: “It doesn’t look like an MBO will be a success. The buyers are likely to be consolidators, not private equity.”

Another source added: “An auction is possible, but it doesn’t mean it will be sold as a single lot.”

Co-op turns over £7bn a year, of which Shoefayre represents about 1%, posting sales of £61.7m last year. The footwear chain recorded losses of £6.3m in 2006, and management have pledged to invest £10m in three years to turn it around (Drapers, July 7).

Co-op refused to comment further. Stylo and Shoezone were unavailable for comment.

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