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Morrisons

Morrisons sells off its convenience stores for £125m

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By Tony Connelly, Sports Marketing Reporter

September 10, 2015 | 3 min read

Morrisons is to sell off 140 of its convenience stores for £125m following huge annual losses.

The supermarket will sell the stores to retail entrepreneur Mike Greene backed by investment firm, Greybull Capital, in a move that signals the end of Morrison’s convenience market ambitions.

Greene plans to rebrand the stores “My Local” and will retain all 2,300 staff members currently working for Morrisons. He will also create a further 200 jobs by reopening 10 of the shops that recently closed.

Morrisons has decided to focus on its core supermarkets after revealing earlier this year an annual loss of £792m. The Morrisons M Local shops contributed £30m to the annual losses which is likely due to poor decisions in locations and trying to play catch up with the likes of Tesco and Sainsbury’s.

The deal may not see Britain’s fourth largest supermarket completely free from the financial burden of the local stores however. The agreement includes a clause which makes Morrison’s liable to a £20m cost of taking back the convenience store estate if Greybull and Mr Greene fail to make a success of the business.

Morrisons chief executive David Potts attributed the failure of M Local to being “unable to scale” but remained optimistic in saying that the company remained “open to other opportunities in convenience in the future."

Potts is due to meet with investors tomorrow after his first interim results since joining the supermarket. He is forecast to report that pre-tax profits have slumped to around £140.7m, from £239m last year.

Morrisons opened its first convience store in 2011 though the majority of the outlets have been open for just two years, with many of the locations in the south-east of England. It will retain just five M Local shops that are on petrol forecourts or have the potential to be converted into small supermarkets.

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