Fashion
UK retailer Tesco has reportedly engaged HSBC to handle the sale of its South Korea retail operations.
Tesco Korea is the hypermarket big’s largest division outdoors its UK house market and analysts estimate the enterprise might fetch between US$5 and $7 billion, sufficient to make a considerable gap in its debt and restructuring bills.
Analysts within the UK recommend personal fairness corporations can be the more than likely potential bidders for the operation, particularly funding arms of Korean banks.
Tesco, the world’s fourth largest retailer by gross sales, might comply with retain a stake within the enterprise
post-sale, and/or license its model, which has robust recognition out there.
Tesco says on its web site it has greater than 400 shops in Korea, together with 500 franchised shops, and serves greater than 6 million clients each week.
“We’ve got a worthwhile on-line enterprise and 22 of our award-winning digital shops in South Korean subways and bus stops assist time-pressed clients store on-the-go utilizing their smartphones.”
The shops are fed by three distribution centres, the most important the Hamahn Recent Distribution Centre, which can also be the most important recent distribution centre in Asia, processing greater than 40 million packing containers per yr.
“We have now elevated the supply of ready fruit & veg and ready-meals in our shops. “We’ve additionally responded to financial pressures by providing a variety of Homeplus own-brand merchandise in three classes, from ‘Good Zone’ fundamentals on the lowest worth level to ‘Greatest Zone’ premium merchandise,” the corporate says.
In addition to promoting items in Korea, Tesco says it exports £36 million of largely non-food merchandise from Korea to the remainder of the Tesco Group.
Tesco has been tipped to divest a few of its Asian operations since an accounting scandal and falling market share within the UK decimated its share worth and new CEO Dave Lewis was appointed to attempt to flip across the struggling organisation.
Tesco additionally has operations in Thailand and Malaysia
The corporate posted a pretax lack of £6.38 billion (US$9.52 billion) for the yr to February 28, largely resulting from writedowns. Its everyday operations stay worthwhile.
Tesco’s overseas retail competitors have already exited Korea, discovering the market, dominated by native gamers, robust to crack. Walmart bought 16 shops there to Shinsegae in 2006 and France’s Carrefour bought out to E.Land Group the identical yr.
