Tesco is apparently planning to sell its restaurant chain, Giraffe. The move is expected to help the British supermarket chain reduce losses and concentrate on its core business.
Giraffe was acquired by Tesco for £50m (€63m, $71m) in 2013, when Philip Clarke served as its chief executive. The motive behind the deal was to help the supermarket chain diversify from its retail business and utilise excess space at some of its stores. Clarke had also expected that the family-friendly restaurant would attract more customers to its stores.
However, Giraffe's losses have only grown since the takeover. It had reported an annual loss of £4.1m for the year ended March 2015. The restaurant chain operates across 60 sites in the UK and reports suggest that private equity firms and other bidders have shown interest in taking over the chain.
Meanwhile, a source told Sky News that the Giraffe sale was not guaranteed and would depend on the terms and conditions laid out by the potential bidder. Another source added that Dave Lewis, who took over the lead role at Tesco post Clarke's sacking in 2014, wanted to sell all those businesses and brands of Tesco that were either reducing the company's profits or were pushing down its turnaround plan.
For instance, after Lewis took over, Tesco went on to sell its business in South Korea for £4bn. The company had also put Dunnhumby, its data analytics business up for sale, but eventually called it off after failing to get any attractive offers.
However, Tesco has not made any official announcement about Giraffe being on sale. The company witnessed a modest 1.3% like-for-like sales growth as it continues to battle competition from Aldi, Lidl, J Sainsbury, Wm Morrison and Asda.