Co-operative Group considers selling off hundreds of stores
The Co-operative Group is considering selling off hundreds of stores as it ramps up plans to revive the business following its near collapse after the financial crisis.
The troubled mutual has earmarked about 300 stores from a "non-convenience" estate of 700 shops which it may put on the market, according to sources.
The group is said to have recruited investment bank Rothschild to drum up interest from prospective buyers, pinpointing small food retailers and discount chains as potential suitors, Sky News reported.
The firm is considering the sale as they sharpen their focus on convenience shopping, but the proposal is still in the early stages and may not go ahead.
The Co-op sold off 91 food stores last year, raising £175 million, because they no longer dovetailed with its "focus on convenience shopping".
It is also trying to offload a tranche of shops it acquired following its ill-fated takeover of Somerfield in 2011.
But any move to sell stores in the future would not affect plans to open 100 new food stores and refit 150 existing shops this year.
The Co-op Group declined to comment.
The plans come after chief executive Richard Pennycook disclosed last week that he had demanded the firm slash his pay after the group finally "turned a corner" thanks to rising sales.
He asked the board to reduce his base salary from £ 1.25 million to £750,000, while his total pay, including bonuses, will drop by more than 60%.
The firm revealed that like-for-like sales across its 2,800 food stores grew by 1.6% in the 52 weeks to January 2, while its funeral business saw sales climb by 9.9%.
But annual pre-tax profits hit £23 million, down from £24 million in 2014 when it was boosted by a £121 million one-off disposal.
Elsewhere, t he Co-operative Bank announced at the beginning of the month that its annual pre-tax losses had more than doubled to £610.6 million in the year to the end of December as it suffered from volatile markets and low interest rates.
The lender said its losses stem from the previous management in place when it nearly collapsed in 2013 after a £1.5 billion black hole was discovered in its balance sheet.