UK Small Caps

LONDON (ShareCast) - Regent Street retailer Liberty (LSE: LBE.L - news) has exchanged contracts to surrender the lease on its Liberty of London shop on Knightsbridge's Sloane Street following an unsolicited offer from a European fashion brand.

"We received a fabulous offer for our Sloane Street lease completely out of the blue," said chairman Richard Balfour-Lynn. "The incoming tenant offered us a £700,000 cash premium for the lease which we will use to further develop the increasingly successful Liberty of London global luxury label."

As a result the Liberty shop will close and all the staff, stock and fittings will transfer to Liberty's Regent Street flagship store. In addition to the cash premium, it is estimated that by refocusing Liberty of London's retail operation into the flagship store there will be annual cost savings of approximately £500,000.

The group said both the Liberty of London label and the broader Liberty retail business has been enjoying a period of revitalisation following last February's 'Renaissance (RNS.NZ - news) of Liberty' launch, which has resulted in double-digit sales growth over the past five months.

"We are now in a series of discussions with major international companies that will provide exciting branding collaboration and distribution opportunities through an increasing number of commercial networks. We are confident these will lead to increased profile and profitability for Liberty of London," Balfour-Lynn added.