Woolies in talks to sell off VCI

WOOLWORTHS, the High Street retailer, is in talks about a possible sale of VCI, one of its entertainment offshoots. VCI publishes and distributes videos, CDs and DVDs and made profits last year of about £5m on sales of £79m. Sales were boosted by Geri Halliwell's yoga workout video, which sold 300,000 copies in three months.

Its other titles include Ali G, Jeeves And Wooster and Thomas The Tank Engine, and the business also has an offshoot producing budget CDs. It is understood that Woolworths, chaired by former Railtrack boss Gerald Corbett, is talking about a sale to a private equity group.

The video business was founded in 1985 and bought by Kingfisher in 1998. As part of the Woolworths business, it was demerged from Kingfisher last August. This month, VCI sold its entertainment-distribution business, Disc Distribution, for less than £1m to focus on video and audio publishing.

The prospect of a VCI sell-off comes two weeks after Woolworths broke off talks with Bhs boss Philip Green about a possible merger. Billionaire Green would have become one of the most powerful retailers in Britain had his idea for a £2bn merger succeeded.

But Woolworths scuppered the deal, releasing a statement to the Stock Exchange that it had called off talks because of 'risks and uncertainties'.

Shares in Woolworths opened at 25p when the group was demerged from Kingfisher. The shares peaked at 54 1/2p last month, but closed on Friday at 40 1/2p.