THE owners of Somerfield have cut their losses on the Kwik Save chain by selling the brand and the majority of its stores, leading to about 40 redundancies in County Durham.

A total of 102 shops will be rebranded as Somerfield and operated as convenience stores, while 171 have been sold for an undisclosed sum to a company set up to operate Kwik Save.

Somerfield said a further 77 stores had been sold to other retailers - thought to include discount chains Netto, Lidl and Aldi. Most staff will transfer, but the chain admitted yesterday that two stores, in Bishop Auckland and Consett, County Durham, would be sold without transferring staff, leading to about 40 redundancies.

Kwik Save stores in Southwick and Pennywell, in Sunderland, Eston, in Middlesbrough, and one in Seaham, County Durham, will convert to Somerfield.

Other stores across the region, in Middlesbrough, Stockton, Hartlepool, Redcar, in east Cleveland, Sunderland, Durham, Chester le Street, Stanley, and Spennymoor, will remain Kwik Save under new ownership.

Somerfield has been owned by a consortium including property tycoon Robert Tchenguiz, private equity firm Apax and investment bank Barclays Capital since a £1.1bn takeover late last year.

A company spokesman said Kwik Save had lost millions of pounds over the past four or five years, despite investment totalling £130m.

It is believed that Somerfield, which will now have an estate of 1,100 stores, was losing about £20m a year on account of unprofitable Kwik Save outlets.

The new company set up to acquire Kwik Save, BTTF, is led by Paul Niklas, the former managing director of Formica, the laminates business.

Mr Niklas's team will include Kwik Save director Steve McArdle as director of stores.