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Britain's Tesco considers Asia exit

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Britain's Tesco considers Asia exit

 

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FILE PHOTO: A company logo is pictured outside a Tesco supermarket in Altrincham northern England, April 16, 2016. REUTERS/Phil Noble/File Photo

 

LONDON (Reuters) - Britain's biggest retailer, Tesco <TSCO.L>, has signaled a further retreat from its once lofty global ambitions by starting a review of its remaining Asian businesses, which could result in a sale of those Thai and Malaysian operations.

 

Celebrating its 100th anniversary, Tesco is five years into a UK-focused recovery plan launched by Chief Executive Dave Lewis after an accounting scandal capped a dramatic downturn in trading.

 

In October Lewis declared Tesco's turnaround complete and said he would step down next summer.

 

"Tesco confirms that, following inbound interest, it has commenced a review of the strategic options for its businesses in Thailand and Malaysia, including an evaluation of a possible sale of these businesses," it said in a statement on Sunday.

 

The company said the review was at an early stage and gave no details of the approaches received.

 

"No decisions concerning the future of Tesco Thailand or Malaysia have been taken and there can be no assurance that any transaction will be concluded," it added.

 

Tesco trades from 1,967 stores in Thailand and 74 in Malaysia. In the six months to Aug. 24 the businesses together generated sales of 2.6 billion pounds ($3.3 billion), up 1% at constant exchange rates, and operating profit of 171 million pounds, up 42.3%.

 

At a capital markets day in June, Tesco had said it was well placed to grow in Asia, particularly in Thailand, citing an opportunity for 750 new convenience stores over the "medium term".

 

But under Lewis the focus of investment has been the UK, spending nearly 4 billion pounds on the acquisition of wholesaler Booker last year.

 

In 2015 Tesco sold its South Korean arm to a group led by private equity firm MBK Partners for $6.1 billion. A year later it sold its Kipa business in Turkey to Migros, the country's largest supermarket chain.

 

Under its previous management Tesco made costly exits from Japan, the United States and China.

 

If Tesco does quit Thailand and Malaysia, its only overseas operations, apart from Ireland, will be its loss-making central European division, consisting of stores in the Czech Republic, Hungary, Poland and Slovakia.

 

Lewis will be succeeded by Ken Murphy, a former executive at healthcare group Walgreens Boots Alliance <WBA.O>, at a date yet to be confirmed.

Shares in Tesco closed at 232.2 pence on Friday, valuing the business at 22.8 billion pounds.

 

(Reporting by William James and James Davey; Editing by Edmund Blair and David Goodman)

 

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-- © Copyright Reuters 2019-12-09
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Interesting strategy. They need a cash infusion; so sell, I guess!

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A re-brand to same same tat in order its become a shop that bears no resemblance to the Tesco name🤔  

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2 minutes ago, Estrada said:

Rubbish... last month in Tesco Seacon Square, there were so many customers that they were queing right back to the rear of the store. I had to wait a month for the situation to improve. It is always busy. Prices are mostly cheaper than Macro, Tops, Big C and Villa. I always compare prices and pick the bargains from each outlet. Some items are used as loss leaders so sometimes one outlet is cheaper for some essentials than others. You just have to get to know the particular outlets special offer rotation.

That was because they were all spending their free 1k baht in there, we did the same in our local one we rarely go in. I prefer Tesco, or Lotus as all the Thais call it for wine etc, the rest of the stuff you can buy anywhere

Edited by Orton Rd
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48 minutes ago, webfact said:

No decisions concerning the future of Tesco Thailand or Malaysia have been taken

Personally, I hope that Tesco sticks around as my local store is always willingly to lend a hand to help out. Maybe Tesco needs to find someone with deeper pockets... 

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