// Asda’s new owners Issa brothers and TDR are considering spinning off fashion label George as they plan to cut costs
// Selling the brand could reduce group debt
// The billionaire owners of Asda are trying to add Caffè Nero to their estate
Asda’s new owners Issa brothers and TDR are reportedly considering spinning off the grocer’s fashion label George, as they plan to cut costs and spending.
The Issa brothers and TDR would be more comfortable licensing the brand or introducing more fashion partnerships to Asda’s shops to use excess space.
Selling the brand could reduce group debt, The Times reported.
- Issa brothers complete £6.8bn acquisition of Asda from Walmart
- Asda owners to fund legal challenge against Caffè Nero
The billionaire owners of Asda are already trying to add Caffè Nero to their estate by buying part of its £350 million debt pile.
Brothers Mohsin and Zuber Issa have approached lenders to the coffee chain seeking to build a position that would allow them to bid for control in a debt-for-equity swap if Caffè Nero was forced to restructure its borrowings.
The brothers’ interest in Caffè Nero, which has 800 sites and employs 6000 staff in the UK, emerged in December when they offered to buy the chain from its founder and main shareholder, Gerry Ford.
The brothers, who are co-chief executives of global convenience and forecourts retailer EG Group, acquired a majority ownership stake in Asda earlier this month.
Asda’s former owner Walmart is retaining a stake and is going ahead with a partnership strategy, introducing Accessorize, Claire’s Accessories and MusicMagpie to its larger stores.
More Asda convenience stores on EG petrol forecourts are expected after the opening of three last year.
The owners have promised to invest £1 billion over the next three years.