Electronics and furniture retailer Smiths City said it will sell its retail and finance operations to investment company Polar Capital for around $60 million.

In the conditional agreement the retailer has entered into with Polar Capital, seven of Smiths City’s 29 stores will not be included in the sale and will close, following a strategic review.

As part of the acquisition, Polar Capital will acquire Smiths City’s assets and existing liabilities, which include commitments made to customers who have paid deposits or are waiting on delivery. The sale is expected to net around $8 million.

According to Smiths City, the final number of stores to be sold is dependent on lease transfers and new lease terms being agreed for those transferring stores. Around 25 per cent of staff will lose their jobs from the deal.

The retailer did not disclose which stores will close. 

Smiths City chair Alastair Kerr said the COVID-19 pandemic has delivered a material and significant shock to the business.

“This shock has substantially shortened the time available for the turnaround programme that was the cornerstone of the company’s strategic plan,” Kerr said. “Faced with this shorter timeframe, it became clear that Smiths City needed to bring new capital into the business to drive the turnaround.”

Kerr said the transaction they have announced today with Polar Capital, owned by Big Chill founder Colin Neal, offers the greatest opportunity for Smiths City to endure for the long term.

“It also offers the greatest opportunity to protect the jobs of as many of our staff as we can in this uncertain time. We are hopeful that under new ownership Smiths City will prosper.”

Neal confirmed that under the impending sale, Smith City’s existing customer commitments would be upheld.

The agreement is conditional on finance and other factors. Smiths City directors said they expect the agreement to be settled on May 22, 2020.