London: British retailer Woolworths Group PLC said Tuesday that its entertainment wholesaling subsidiary EUK agreed to supply Virgin Retail with entertainment and associated products.
EUK has been awarded a three-year contract and will assume responsibility for buying Virgin Retail's music, DVDs, games and books and other products from June 1 2007, Woolworths said in a statement.However, the value of the deal was not disclosed.
At 0930 GMT Woolworths shares were up 2.3 percent at 33-1/2 pence, valuing the business at about 482 million pounds ($943 million). The stock has underperformed the UK retail sector <.FTASX5370> by 9 percent over the past 12 months, with the firm issuing a profit warning in the run-up to Christmas.
Virgin Retail, owned by Richard Branson's Virgin group, operates 127 stores in the U.K. and Republic of Ireland.
Investec Securities analysts said the deal was likely to generate around 250 million pounds in sales and should boost pretax profits by at least 6 million pounds in a full financial year, with a lift of about 4 million likely in fiscal 2007-8.
At 8.02 am shares in Woolworths were up 3/4 pence, or 2.3 pct, at 33 pence, valuing the business at 481 mln stg.