Somerfield is selling 270 Kwik Save stores |
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Sun, 26 Feb 2006 20:50
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LONDON: Supermarket chain Somerfield is planning to sell 270 of its budget stores, Kwik Save, according to news reports.
Somerfield, now owned by a consortium including property tycoon Robert Tchenguiz, Apax and Barclays Capital, is said to be in talks with a number of buyer for its loss-making business.
Latest reports indicated that Richard Kirk, chief executive of Peacock Group, is a front-runner to buy a majority of these stores with his own funds. Kirk had acquired Peacock Group with the help of hedge funds in a 405-million-pound deal in November last.
Iceland's retail group Baugur is also keen on buying a number of these stores. The other potential buyers could be Aldi, Lidl and Netto, all of Europe, the reports said.
The consortium had bought Somerfield for 1.1 billion pounds late 2005. It had brought in a new management team and restructured the business, which included converting the better performing Kwik Save stores into Somerfield mould and selling the remaining ones, mostly located at secondary sites. The company is said to be losing 40 million dollars a year on account these unprofitable stores.
A spokesman for the company refused to comment on the report that the Kwik Save stores are for sale.
Baugur had earlier hinted at buying the whole of Somerfield but withdrew following internal problems.
Kwik Save vends a range of branded goods at knock-down prices. Somerfield had bought the business in 1998.
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Somerfield now left with only one bidder 