Tesco Offloads Japanese Branch
By Laura Elliott.
UK supermarket giant Tesco has announced that it plans to off-load its loss-making Japanese branch. The retailer has managed to release itself from the struggling Japanese business for what has been described as a “nominal sum” paid to the country’s largest retailer. However, Tesco has also had to commit a shocking £40 million to the branch before the transition is completed .
Tesco first entered into Japan in 2003. However, the business has lost around £60 million over the past two years. Last year, the supermarket giant announced that it had plans to leave the country, and its 117 small stores which are based there.
The retail giant has branches in 14 countries, but only accounts for around 0.1% of the Japanese market. Now, in a process spanning two stages, the chain will sell half of its shares to Aeon for a nominal sum, thereby creating a joint venture. Tesco will then invest the £40 million into this venture, in order to “finance further restructuring”. After this, the retailer will have no more financial contact in Japan. A situation which will surely come as something of a relief to the beleaguered supermarket chain.
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