Musgrave group sells off its British operation for £40m
Cork retail group Musgrave, which owns the Centra, Mace and Supervalu brands, has ended more than a decade-long failed foray into Great Britain.
Musgrave has sold its loss-making business there for just £40m - less than a quarter of the net price it paid for it.
The company has agreed to sell its Budgens and Londis business in Britain to UK retail and wholesale group Booker.
Family-owned Musgrave first took an effective 43.5% stake in Budgens in 2000. It bought that stake and convertible loan stock for €146m from German retailer ReWe.
In 2002, it paid another £232m for the remainder of Budgens. Musgrave bought the Londis franchise for the UK in 2004 for £60m. That bought the total spend buying the businesses to £382m.
But Musgrave has kept its Centra business in Northern Ireland.
Musgrave chief executive Chris Martin said that the experience of the group in Britain has been "difficult".
Mr Martin said that the net price paid by Musgrave for Budgens and Londis, following the sale of company-owned stores to franchisees, was £200m.
"It was a tough market for us," he conceded.
Budgens, with 167 franchised stores, generated sales of £329m last year. There are 1,630 Londis stores in Britain that generated £504m in sales in 2014. On that turnover, the units made a pre-exceptional operating loss of £7.4m last year.
In its 2013 annual report, Musgrave noted that its Budgens and Londis brands had experienced a "significant worsening" of their results due to factors including intense competition by multiples in the convenience sector. In 2013, Musgrave wrote off the remaining €78.3m (£55.6m) in goodwill that had arisen on the acquisition of Budgens and Londis. Mr Martin said that Musgrave and Bookers will also develop a strategic partnership.