Tesco has continued its sell-off of non-core assets with the disposal of its Euphorium bakery business.
The retailer is selling Euphorium’s five high street outlets and Islington factory to the 30-strong coffee chain Soho Coffee, whilst Samworth Brothers will acquire its Weybridge factory. The financial terms of the deal were not disclosed.
Meanwhile, the 59 Euphorium concessions in Tesco stores will be bought under the retailer’s own banner. Existing staff will be offered the opportunity to transfer to the supermarket.
A spokesperson for Tesco said: “We know how important a great bakery offer is to our customers, and this agreement will mean we can continue to serve shoppers with great quality Tesco bakery products.”
As part of its turnaround plans, Tesco has already sold Dobbies Garden Centres, restaurant chain Giraffe and the Harris + Hoole coffee business in the UK, as well as its Korean and Turkish divisions.
- As further evidence of deck clearance rather than deckchair-shifting, the Euphorium disposal is to be welcomed, given that Tesco is a great shopkeeper, rather than a processor.
- Key will be the retailer’s ability to squeeze existing assets in a (for multiples) contracting market (think little scope for inflationary price increases, inability of suppliers to share the cost-burden, large space redundancy)
- Scope for suppliers to really tailor-make initiatives to Tesco realities