MARKS & Spencer will expand its retail space in Edinburgh's Princes Street by more than 30% as part of the acquisition of 19 stores from Littlewoods for #192.5m in cash.

The chairman of Britain's largest clothing retailer, Sir Richard Greenbury, outlined the deal at the company's annual meeting in London yesterday.

It follows last month's revelation that Littlewoods intends to streamline its operations and focus on smaller store formats in the High Street.

If Littlewoods shareholders approve the sale at a meeting on September 16, Marks & Spencer will begin refurbishing the stores in February. The first re-opening is planned for next autumn.

Saying the deal would enhance shareholder value, Sir Richard emphasised that all of the stores being purchased were in areas where the company had been seeking extra footage for many years.

The acquisitions will give the company an additional 600,000 sq ft of selling space, including the 34,600 sq ft Littlewoods site in Princes Street.

The Edinburgh property is the only one of Littlewoods' 15 Scottish department stores affected by the deal. It employs 103 people, including 18 full-time, 50 part-time and 35 temporary staff.

All 19 stores purchased will continue trading through the Christmas period, after which they will be closed down.

Marks & Spencer is under no obligation to retain employees of Littlewoods, and thus they will be made redundant when the stores close at the beginning of next year.

Job losses across the privately-owned group are expected to be between 1700 and 1800, with about 80% of these believed to be part-time positions.

A spokeswoman for the company said both the Marks & Spencer department store to the east of Littlewoods and the smaller M&S menswear shop to the west of the site would remain open, with the new property viewed strictly as an addition to current selling space. What is not yet clear is what Marks & Spencer will do with the extra space.

A logical step would be to move either household goods or clothing out of the main department store, but the company was unwilling to confirm or deny such speculation yesterday.

The spokeswoman said details of individual refurbishments would be released in relevant areas after the company had ''firmed up'' its plans and had a chance to see how the additional footage could best be used.

Estimates on the overall cost of the re-fitting programme are not being released.

Retail analysts were generally positive about the deal, saying Marks & Spencer had acquired a very attractive portfolio of sites. ''What's really encouraging is that they've got a decent slug of Littlewoods' stores,'' one analyst said. ''There is good potential there.

''Overall, the news is not crucial, but positive.''

The other stores involved are in Bath, Belfast, Bromley, Cardiff, Carlisle, Chester, Derby, Dudley, Ilford, Kingston, Leeds, London, Newcastle, Norwich, Peterborough, Shrewsbury, Watford and Worcester.

Richard Ratner of Mees Pierson Securities said the quoted company could expect to generate additional sales of #360m to #400m from the same space that was producing sales of only about #120m for Littlewoods.

Sir Richard said the company had put in an encouraging first quarter performance in the new financial year, with overall clothing sales up by nearly 10%.

Food sales were up 2.3%, adjusted for Easter, and in June and July were said to be running 3.5% ahead of last year.

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