10th Jun 2016 06:18
LONDON (Alliance News) - Tesco PLC on Friday said it sold its 95.5% stake in Turkish supermarket chain Kipa as well as its UK restaurant chain Giraffe.
The disposal of Kipa will result in Tesco receiving cash proceeds of around GBP30 million, which the grocer said will contribute to Tesco's goal of reducing debt by around GBP110 million. It is being sold to Swiss retail company Migros.
"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," Tesco Chief Executive Dave Lewis said in a statement.
Meanwhile, Giraffe is being sold to Boparan Restaurant Holdings Ltd for an undisclosed amount. The sale includes 54 standalone restaurants, of which 12 are franchise sites and three restaurants within Tesco stores.
"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. 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," Lewis said.
According to a Sky News article on Thursday, Boparan, a vehicle of entrepreneur Ranjit Boparan, owns Harry Ramsden's fish and chip restaurants. Boparan also owns upmarket Indian restaurant The Cinnamon Club and is the controlling shareholder in 2 Sisters Food Group, the owner of Goodfella's pizza and the UK's largest chicken supplier.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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