Tesco Starts Sell-Off Ahead Of Results With Asian Disposal
Tesco has fired the starting gun on an expected sell-off of non-core assets, with the sale of some of its stake in Asian online business Lazada.
The supermarket giant said its overseas division had sold 8.6% of its Lazada stake to Chinese internet giant Alibaba for $129m (£90.6m).
Tesco will retain an 8.3% holding in the South East Asia-focused business.
The move comes the day before Tesco’s annual results, in which it is expected to announce further disposals.
The supermarket group is planning to sell off some of its side businesses, including Dobbies Garden Centres chain, coffee shop chain Harris & Hoole and restaurant chain Giraffe, so that it can focus on the main supermarket business, according to media reports.
Last September, Tesco sold its South Korean business, Homeplus, for £4.2bn to help shore up its balance sheet and revitalise its UK business.
Price cuts
There has been speculation about possible disposals since chief executive Dave Lewis took the helm in September 2014, charged with reviving the group’s fortunes.
Mr Lewis was parachuted in after the supermarket reported it had overstated its profits by some £263m.
Alongside this, like its “big four” peers – Asda, Sainsbury’s and Morrisons – Tesco has been hit by competition from discount rivals Lidl and Aldi.
The UK has also seen a broad change in shopping habits, with many customers preferring to shop little and often at small convenience stores, instead of doing a once-a-week “big shop”.
In April last year, the company reported a record pre-tax loss of £6.4bn for the year to February, marking the biggest loss reported to date by a British retailer.
Mr Lewis has focused on price cuts and putting more staff in stores in an attempt to revive sales.
On Wednesday, he is expected to report a rise in underlying fourth-quarter sales, the group’s first quarterly increase for more than three years.
Tesco declined to comment on the sale of its side businesses.
Apr. 12, 2016 on BBC News
Read more here
