Retail

Morrisons Completes £220m Logistics Sale And Leaseback Deal

By Dayeeta Das
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Morrisons has completed a £220 million (€255.3 million) sale and leaseback deal for seven logistics properties with asset manager ICG, the British supermarket group said on Friday.

It said it will lease the properties back for up to 25 years, adding that the transaction will help finance further investment in the business, including five new supermarkets next year.

Morrisons, which recently lost its status as Britain's fourth largest supermarket group by market share to discounter Aldi, has been owned by US private equity firm Clayton, Dubilier & Rice for just over a year.

'More Accessible Business'

Jo Goff, Morrisons chief financial officer, said, "We continue to invest in our strategy of becoming a broader, stronger, more popular and more accessible business and this transaction will help to finance further investment.

"The acquisition of McColl’s earlier this year gave us a leading position in the UK convenience market and next year we plan to open a further five supermarkets across the UK, and to invest further in our manufacturing operations."

Last month, Morrisons announced plans to close 132 McColl's convenience stores that have no realistic prospect of making a profit in the medium term, putting 1,300 workers at risk of redundancy.

In September, the retailer reported a halving of its third-quarter core earnings, as underlying sales fell 3.1% against the backdrop of a cost of living squeeze.

The group reported core earnings of £177 million (€197.9 million) in the 13 weeks to 31 July, down from £356 million (€397.9 million) in the same period last year.

News by Reuters, additional reporting by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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