The Co-operative is to offload Somerfield stores following a tumultuous eight year relationship.
The Co-op has already approached potential buyers across nearly 100 locations in Britain; over 40 of these trade under the Co-operative Food brand, Sky News reported.
The Group’s decision to offload the former Somerfield stores highlights its continued financial struggle since a £2.5bn loss in 2013.
In an attempt to restore its losses, the group has sold its agricultural business and pharmacy operations for hundreds of millions of pounds, in addition to resigning a stake in its Co-op Bank to investors.
In 2008, the Co-op paid close to £1.6bn for the Somerfield estate, adding 800 stores to its portfolio. The acquisition was not a successful one, leading to significant lowering in the value of Somerfield and mutual debts among the two business.
It is understood that trading stores recorded a profit of almost £1m in 2015. Since the appointment of a new management team, the overall Group’s performance has improved significantly. In the first half of 2015, like-for-like sales growth for its food business rose by 0.8%, while its convenience estate grew by more than 3%.
These stats hint that prospective buyers are likely to be turnaround specialists.
The Co-op declined to comment.
Similarly, WM Morrison sold its convenience stores last year for around £25m, however the big four grocer has resurrected the chain under the M Local name.