Asda is selling its loss-making photo business to Photo-Me International for about £5.4m in cash as the supermarket chain reduces the number of services it offers directly in its stores.
Photo-Me will buy 191 Asda in-store photo centres and 172 self-service kiosks and operate the supermarket’s online photo-processing service. It will pay £3.35m for the business and will also buy about £2m of stock.
The world’s biggest photobooth operator will manage the sites as concessions in stores for 10 years and pay commission to Asda. Employees at the photo division will work for Photo-Me after the deal is finalised in October.
Asda is getting rid of surplus services such as in-store pizza-making as it seeks to reverse plunging sales at its main grocery business. The Walmart-owned chain has faced intense competition from Aldi, Lidl and a revived Tesco amid an ongoing price war between food retailers.
Photo-processing had already been earmarked for the chop by Asda, with Photo-Me saying in April it was interested in buying the business, which lost £3.4m last year on sales of £19.3m. Photo-Me said it expected to increase sales by installing better equipment, revamping layouts and introducing new products.
Serge Crasnianski, Photo-Me’s chief executive, said: “This is an interesting opportunity to significantly expand our UK business in a strong set of locations and increase our market share in the digital photo printing market, which we believe has growth potential in the digital age.”
Photo-Me’s main business is operating photobooths and digital printing kiosks. It trades in 17 countries and has 6,600 photobooths in the UK. Underlying pre-tax profit rose 15% to a record £40.1m last year, helped by demand for photos for an identity card in Japan.
