UK's Morrisons in talks to sell convenience stores
LONDON (Reuters) - Morrisons (MRW.L: Quote), Britain's fourth-largest grocer, is in advanced talks to sell its convenience stores to investment firm Greybull Capital as new chief executive David Potts seeks to focus the business on its traditional supermarket estate.
A source familiar with the matter told Reuters Greybull was working with a team of industry executives to take over about 150 stores that trade as M local and generate annual sales of about 300 million pounds ($470 million).
The possible deal was first reported in the Sunday Telegraph newspaper.
Both Greybull and Morrison declined to comment.
Morrisons was a late entrant into Britain's fast-growing convenience sector, opening its first stores in 2011. Though it has since grown at pace, its convenience presence is tiny compared with bigger rivals Tesco (TSCO.L: Quote) and Sainsbury (SBRY.L: Quote) and has little bearing on its profit performance.
A ramp-up under former CEO Dalton Philips failed to deliver the level of trading it had anticipated.
Morrisons said in March it would close 23 M local stores during its 2015-16 financial year and would significantly slow new openings. It would also review the M local project and approach to site selection.
Potts, who joined as CEO in March, has said he did not think M local was working in its current form and believed many stores were not in the right location.
He has said his priority is improving the performance of Morrisons' more than 500 core supermarkets and making the group simpler, leaner and more cost conscious. Continued...