Tesco Plc agreed to sell its Dobbies Garden Centres chain for £217 million ($309 million) as the UK’s biggest retailer continues to sell peripheral assets to focus on reviving its main supermarket business.
Dobbies, which operates 35 garden-center stores across Scotland, England and Northern Ireland, will be bought by an investor group led by Midlothian Capital Partners and Hattington Capital, Tesco said in a statement Friday.
“It was a difficult decision to sell the business, but we believe this agreement will give Dobbies a bright future, while allowing our U.K. retail business to focus on its core strengths,” Chief Executive Officer Dave Lewis said in the statement.
The sale is another step in Lewis’s efforts to recapture Tesco’s investment-grade credit rating. The company’s financial position has been weakened by a price war in the U.K., coupled with onerous leases on stores and pension obligations. Last week, Tesco agreed to sell its Turkish grocery business Kipa and U.K. restaurant chain Giraffe.
Tesco, which has owned Dobbies since 2007, said it will continue to offer customers home and garden products through its own stores and online.
© 2016 Bloomberg L.P
