Woolies sets sights on Peacock

WOOLWORTHS, which has revealed it held merger talks with Bhs, has itself been studying plans for a takeover of the Peacock discount clothing group. The Peacocks deal would be a way of strengthening Woolworths' £270m-ayear clothing business.

Woolworths stores stock Ladybird children's clothes. The group also sells more than £40m of adult clothing a year through 16 Big W discount stores. Peacocks supplies the clothes for Big W and is involved with a trial scheme to supply a limited range of basic clothing to Woolworths.

Neither Woolworths nor Peacocks will comment on talks. But senior sources say Woolworths chief executive Gerald Corbett has met Richard Kirk, his opposite number at Peacocks.

Peacocks is thought to be lukewarm about the idea unless Woolworths is prepared to make an offer that would pay investors largely in cash rather than in new Woolworths shares. Woolworths is valued at more than £600m - about five times as much as Peacocks.

The wooing of Woolies