Fri, 01 Apr 2016 | DIVISION SALE
Tesco is looking to sell off its loss-making Giraffe restaurant chain, which it originally purchased during the ill-fated reign of its former chief executive.
Various media outlets see Tesco’s proposed exit as a way to distance itself from the wrong-footed strategy adopted by Phil Clarke, the supermarket giant’s former chief executive. Mr Clarke had originally envisioned that Giraffe would help draw customers into Tesco’s UK stores, but this has proved to be a pipe-dream, as the restaurant chain posted losses of £4.1 million last year.
Giraffe, which now has 60 restaurants across the UK, was bought by Tesco in 2013 for around £50 million, but its subsequent sale would make scant difference to Tesco’s multi-billion balance sheet.
Tesco has reportedly approached private equity firms and other potentially interested parties ahead of a sale. However, a company spokesman refused to comment on the proposed deal.
In 2015, Tesco sold off its loss-making online streaming service Blinkbox, making an overall loss on the sale. The year before that, the supermarket chain sold off its South Korean Homeplus brand for around £4.2 billion. At the time, chief executive Dave Lewis said the deal enables Tesco “to make significant progress on our strategic priority of protecting and strengthening our balance sheet”.
Mr Lewis’s strategy is to offload several peripheral firms in order to focus on its grocery business.
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