UNITED KINGDOM - It’s no secret that Tesco has been trying to cut costs in recent years, reporting a $9.6 billion loss in 2014, and recently being part of rumors the chain may cut 39,000 jobs over the next three years. Now, new information has come to light that Tesco plans to cut out a large chunk of locations from its health-focused Nutricentre branch, as well as exiting from its Giraffe restaurant chain in its entirety.
According to news source Retail Week, the struggling grocer will close 12 of its Nutricentre stores and 11 of its concession stand off shoots. This will reportedly affect as many as 137 of the chain’s employees, with 79 floor staff members, 26 head office employees, and 7 concession staff members, and several other miscellaneous employees.
This is on top of reports from several news sources that Tesco will be eliminating its entire Giraffe restaurant chain. As explained by Sky News, private equity firms and other bidders are have been in private talks with Tesco about buying Giraffe, which operates about 60 sites across the United Kingdom.
Acquired by Tesco under Philip Clarke’s leadership as CEO in 2013 for £50 million, the chain was a way of “diversifying” and filling “redundant space” in its stores, Sky News reports. Dave Lewis, the CEO that took Clarke’s vacated position, made it a point to vacate businesses and brands which were unprofitable or distracted from Tesco's core U.K. business.
As of now, the sale of Giraffe is not yet a certainty, but could occur in the next several months, sources say.
As we previously reported, under Lewis’ leadership the company has approved the sale of Tesco's South Korean branch Homeplus for $6 billion U.S., but recently called off an auction of Dunnhumby, its data analytics business, after it failed to attract strong enough offers.
For more on Tesco’s developing turnaround plan as information is divulged, keep reading AndNowUKnow.
