Estonian shipping company Tallink Grupp has reached an agreement to divest its 100% stake in Baltic Retail, a domestic fashion retail business, to Talwest Grupp.

Established in January 2018, Baltic Retail is a wholly owned subsidiary of Tallink focused on fashion retail sales in Estonia.

The company employs 35 people and operates eight retail stores in shopping centres in Tallinn.

It also holds franchise rights to five fashion brands, namely Esprit, Vero Moda, Jack and Jones, SuperDry and United Colors of Benetton.

Following the deal, Talwest Grupp will take over the onshore franchise rights of these five brands.

Tallink Grupp, along with its subsidiaries, will continue to operate through smaller onshore travel retail outlets and its goods store, Tallink Express in Tallinn.

It will also continue to roll out Burger King restaurants in the region.

The companies have not disclosed the financial terms of the transaction.

Tallink Duty Free head Aimar Pärna said: “Baltic Retail and the expansion into the onshore fashion retail market made perfect sense a few years ago, before the pandemic and building on our decades of experience with travel and fashion retail on board.

“We have extensive knowledge, strong partnerships with global brands and pre-pandemic great ideas and plans for growth and expansion on shore. However, right now, we must readjust our plans and refocus.

“Our sights are currently firmly set on securing and strengthening our core business and onboard operations, as well as on the growth and expansion of our online retail presence.

“In the current world and new shopping habits where online has come to dominate, this is where our energy and efforts should be directed in the short to medium term.”

Tallink Grupp said that the sale of Baltic Retail will not affect its consolidated financial results or those of its subsidiaries.