Tesco sells Dobbies Garden Centre chain as boss Dave Lewis dismantles legacy of predecessors
Tesco boss Dave Lewis continued his dealmaking spree today, selling off Dobbies Garden Centres to a group of investors.
Guy Hands’ Terra Firma, owner of Dobbies’ main rival Wyevale, lost out to a consortium led by Midlothian Capital Partners and Hattington Capital, which bought the chain for £217 million.
That was below the £255 million its assets were valued at in February’s accounts, but ahead of the widely touted price tag of £200 million and the £156 million it paid for it in 2007.
The deal follows the sale of Giraffe Restaurants, on which Tesco took a loss, and a 95% stake in its Turkish business Kipa.
Last year Tesco offloaded its South Korean Homeplus division for £4 billion after disposing of its Japanese, US and Chinese arms. Tesco’s international operations now comprise only businesses in Thailand, Malaysia, central Europe and Ireland.
The Harris + Hoole coffee shops chain is also on the block and a sale could come within weeks.
Verdict Retail analyst Greg Bromley said upmarket Harris + Hoole has wide appeal and Lewis will be looking for a good price.
The slimming represents a dismantling of the legacies of Tesco’s former bosses Sir Terry Leahy and Philip Clarke, who led expansion.
Lewis, parachuted in two years ago to revive Tesco following a string of profit warnings and an accounting scandal, wants to focus on core supermarkets and shore up the balance sheet.
His efforts are beginning to bear fruit. Tesco returned to the black this year after making a record loss in 2015 and saw its first quarterly rise in same-store sales for three years in April.
Investors will hope for more of the same when the company reports first-quarter figures next Thursday, though Lewis has warned its recovery may “not be in a smooth line”. The shares rose 2.55p to 155.2p.
