DERRYS department store in Plymouth is set to be sold but jobs will be ‘safeguarded’, its boss has told The Herald.

Plymouth and South West Co-operative Society announced yesterday that it is in talks to dispose of its non-food business to the Liverpool-based retail and department store group Vergo Retail Ltd.

Vergo boss David Thompson said the 180 part-time and full-time jobs at the store in the city centre would be protected.

He said: “I think this is good news for Plymouth. It should give a breath of fresh air into the store.

“We are taking all the store staff over on normal-term duty, safeguarding their jobs.

“It is going to be new management with different ways of doing things. We want to expand the product range there. There are ample opportunities to put more products in.”

The announcement yesterday includes not only Derrys but also the Homemaker store in Plympton, which employs 40 staff, and the Homemaker stores in Launceston, Kingsteignton and Exmouth.

The sale is to be made to Vergo for an undisclosed sum. All employees concerned – as well as a small team of head office non-food management and administration staff – are scheduled to transfer to the new owners, as would the Plymcare electrical repair business.

A spokesman for the Plymouth and South West Co-operative Society said that, nationally, the Co-operative movement was ‘moving away from non-food retailing’ and for the Plymouth and South West Co-operative Society it is ‘an area of the group which has been making losses for several years’.

Vergo Retail Ltd specialises in regionally significant retail department stores, bringing ‘fresh ideas to revitalise their trading fortunes’.

Douglas Fletcher, chief executive of the Plymouth and South West Co-operative Society, said: “The society is well known for its non-food stores, especially Derrys department store in Plymouth, so it has been a very difficult decision for us to seek a purchaser.

“From a business point of view, however, the loss-making non-food side of the business was unsustainable. This has been compounded by the Co-operative movement as a whole moving away from the non-food market with a resultant loss of group-wide buying power.

“The Plymouth and South West Co-operative Society is delighted to have found a buyer such as  Vergo Retail, which has ambitious plans to secure a successful future for Derrys, the four Homemaker stores and their employees.”

David Thompson is a former director of Mothercare, Habitat and BHS – and, more recently, director and shareholder of Mk One which was sold in 2004 for £55 million. Stores trading within the group include Liverpool’s iconic Lewis’s, Sunderland’s 205-year-old Joplings department store and Robbs of Hexham.

Mr Thompson said: “We are very pleased to be expanding our group into the South West with the acquisition of these five stores which have real synergies with the current Vergo Retail portfolio.

“There is scope for significant further growth through the expansion of product ranges across all the stores and this is something we will be looking at an early stage.

“All of our existing stores are important and longstanding features of retail within each of the towns or cities that they serve. This means that we understand the importance of the stores concerned and the important part they play in their local communities and in particular the position of Derrys as a prominent store on Plymouth’s retail landscape.”

A spokesman for Derrys and Homemaker said that customers ‘need not worry about orders that are awaiting delivery’ as these will be fulfilled as normal by Vergo, which will operate on a ‘business as usual’ basis.

The spokesman also said that Derrys will continue to trade under its existing name and will retain its Post Office and hairdressing salon – while the retail name for the Homemaker stores is likely to change within the next year. Co-operative food stores and funeral homes will ‘not be affected by the proposed sale’.

Some smaller outlets which are part of the society’s non-food business are not included in the proposed sale and are likely to close unless a buyer or buyers can be found – including the linens and cookshop outlets on Tesco’s Transit Way site in Plymouth, Tavistock Linens, and the Snips hairdressing salons at Transit Way and Crownhill.

Mr Thompson added: “I consider Plymouth to be a good place to invest in.

“It is not the best time in the retail climate but, equally, we have to take the view of when to get in there because the retail climate will change for the better.

“Don’t ask when it will get better but I believe we are fairly close to the end.”

The Co-op has launched a consultation process with its staff and trade unions. Nick Ireland, USDAW divisional officer, said: “We are pleased that the Co-op’s non-food business in Plymouth and the South West has been sold as a going concern.

“In the current economic climate we welcome the job security that such a buyer can offer and look forward to working with Vergo Retail and supporting our members going forward.”

Ian Thompson, Devon area director for the South West Regional Development Agency, said: “This just goes to show that there is some good news around even in a recession and that there are business opportunities out there for companies who get their strategy right.

“It is also a welcome vote of confidence in Plymouth and the wider region from an inward investor who clearly sees the potential for successful trading and future growth.”