Britain’s Tesco eyes plan to reduce exposure to Turkey
LONDON, United Kingdom – British retailer Tesco, under pressure to turn around declining sales in its domestic market, is considering reducing its exposure to Turkey, the Financial Times reported on Friday.
Tesco, the world’s third-largest retailer, is looking at combining its operations in Turkey, where it trades as Kipa, with the country’s biggest food retailer Migros, the paper reported, citing people familiar with the situation.
A deal could be along the lines of that which last year enabled it to fold its unprofitable Chinese operation into a state-run Chinese company as a minority partner.
“We don’t comment on rumour or speculation,” a Tesco spokesman said.
The owner of Migros, private equity firm BC Partners, also declined to comment.
Tesco is almost two years into a 1 billion pound ($1.6 billion) turnaround plan in Britain, where it generates two thirds of its revenues but has been losing ground after focusing investment on overseas expansion.
In addition to the Chinese deal last year, it also called a half to its loss-making Fresh & Easy venture in the United States. It pulled out of Japan in 2012.
Tesco said in October that its 191 stores in Turkey had a poor first half and that some restructuring of operations in the east of the country was possible.
The company’s chief financial officer, Laurie McIlwee, said then that its western business around the Mediterranean coastline was “very profitable” and that Tesco had no plans to exit Turkey.