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".
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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.