Tesco plans to offload non-core UK assets

[LONDON] Tesco, Britain's biggest retailer, is drawing up plans for a clearout of loss-making businesses, including Dobbies Garden Centres, as it focuses on reviving its main grocery business, Sky News reported on Monday.

Sky News, citing unnamed sources, said Tesco chief executive Dave Lewis has approved the appointment of investment bank Greenhill to work on the sale of Dobbies.

It said Tesco also planned to sell coffee shop chain Harris & Hoole and restaurant chain Giraffe.

Such businesses represent a tiny proportion of Tesco's forecast revenue in 2015-16 of more than 55 billion pounds (S$105 billion).

A spokesman for Tesco declined to comment on what he said was "rumour and speculation" while Greenhill could not immediately be reached for comment.

After Mr Lewis sold Tesco's South Korean business for 6.1 billion pounds last year he said he did not anticipate any further substantive changes in the make-up of the group. But that did not preclude the disposal of small, non-core assets.

Tesco is expected to report a first quarter of underlying UK sales growth for more than three years when it publishes 2015-16 results on Wednesday, adding to evidence that Mr Lewis' recovery plan is working.

Shares in Tesco, up 30 per cent so far this year, were up 1.7 per cent at 193.9 pence at 0933 GMT.

REUTERS