Coats hangs up its major labels.
Chief executive Martin Flower said the group's efforts to revive both chains had fallen flat despite the consumer boom.
'Their potential is most likely to be realised by an owner with the skills and resources found in the UK fashion retail marketplace,' he said.
The group's fashion retail division ran up losses of pounds 8 million in the first half after Jaeger's spring range failed dismally.
Coats, which as Coats Viyella was once one of the UK's top 50 companies, has been considering a sale for the past two years. It wants to concentrate on building up its sewing threads business, which supplies garment manufacturers around the world. Threads now account for around 80 per cent of its sales.
Mr Flower said: 'It was a question of when, not if, and the announcement is essentially the final stages of a long process.'
Jaeger is sold through 52 stores and 94 concessions, mainly in the UK, while Viyella retails in 35 stores and 136 concessions.
Some 2,600 people are employed across both brands, with Jaeger operating a knitwear plant in Belper, Derbyshire.
The decision to go ahead with the sale follows a disastrous attempt to rejuvenate the traditional Jaeger brand, whose spring and summer ranges left its core customers cold.
'We went too far, too fast in terms of making the range more fashionable, more attractive to a younger consumer, and I think we alienated the traditional, older Jaeger customer,' said Mr Flower.
He said this problem had been corrected for the brand's autumn and winter ranges.
Coats also wants to sell its Bedwear division, which owns the Dorma brand, as part of the restructuring and its India Textiles business.
The Bedwear business employs 1,700 staff with plants in Maydown, Northern Ireland, Chinley, Derbyshire and Burnley.
Losses at the Bedwear arm spiralled to pounds 1.1 million in the six months to June 30 from pounds 200,000 last year on lower sales to Marks & Spencer.
With the economic downturn affecting Coats' core threads business, group pre-tax profits fell six per cent to pounds 4.7 million in the half-year.
Mr Flower said a deal for both Jaeger and Viyella could fetch pounds 50 million but added he would also consider separate transactions.
All of the disposals should be completed within six months and he said they would allow management to focus exclusively on threads.
Coats is already the world's largest supplier of industrial sewing thread. It also sells into the consumer sector under the Red Heart brand.
Operating profits within the threads business tumbled from pounds 41.5 million to pounds 28.8 million in the first half of the year.
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|Publication:||The Birmingham Post (England)|
|Date:||Sep 13, 2002|
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