Tesco to offload non-core retail and restaurant assets

In a bid to stabilise and boost profitability in its European and Asian operations, supermarket chain Tesco has this morning (June 10) confirmed the sale of two of its non-core assets.

The company is proposing to sell its 95% controlling stake in Kipa, a Turkish retail company, to local rival Migros in a deal worth £30m. The transaction would reduce Tesco’s total indebtedness by around £110m.

Commenting on the deal, Tesco chief exec Dave Lewis said: “The sale of Kipa reflects the particular strategic challenge we have faced in Turkey as a small regional player in a highly competitive market.

“It removes the need for the sustained investment required to enable the business to compete independently, allowing us to focus on improving profitability in Central Europe and continuing to grow our businesses in South East Asia.”

The statement continued: “The sale agreement recognises the significant improvements in the performance of the business over the last 18 months and I would like to thank Kipa colleagues, suppliers and partners for their service during a period of considerable change.”

Elsewhere, the supermarket giant is planning to sell its Giraffe chain of restaurants to leisure operator Boparan Restaurants Holdings Limited.

Today the brand, which Tesco acquired in 2013 for £49m, encompasses 54 standalone restaurants and three based in Tesco stores.

Speaking further, Mr Lewis said: “As we stabilise the business in the UK, we continue to focus on where we can best serve the needs of our customers, while ensuring our business remains sustainable for the long-term.

He added: “Giraffe is a much loved brand, and while casual dining remains an important part of the shopping trip for many of our customers, we will continue to meet these needs through our Tesco Cafés and other providers.”