John Menzies has announced it is to pull out of the High Street with the sale of its newsagents chain.

The company also said it planned to demerge its troubled Early Learning Centre children's shop chain "within the next three to five years."

Chairman David Mackay said Menzies would concentrate on being a newsagents' wholesaler and distributor and a freight handler.

The chain employs 1,590 full time staff across the country, with 3,089 part-time workers, the company said.

The announcement came as the company reported a sharp drop in profits for the six months to the end of October, down from £2.4m in 1996 to just £200,000 last year.

Mr McKay said: "Led by this distribution services performance and given the fundamental changes planned for the group, we expect that profit for the year, before exceptional costs, should show a satisfactory result.

"I have no doubts that our focus on distribution and concentration on this sector is the way ahead."

Early Learning Centre review underway

The company said a major review of strategy was well under way at Early Learning Centre and the business would concentrate on its "well-respected toy core" and withdraw from selling nursery equipment and childrenswear.

Major review of strategy already well under way at Early Learning Centre

These product streams will be traded out during the first half of 1998, and Early Learning will reduce trading space in the 22 stores which currently stock them.

Savings of about £3m a year are expected as a result of the move.

The company said it was in the final stages of negotiations with Lufthansa to take over its cargo handling operation at Heathrow in a joint venture with its ground handling company.

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