Asda to raise £568m in store sell-off as sales continue to fall
Asda is selling off 24 stores and a distribution centre – and leasing them back – to raise £568m in what has been called a “sign of weakness” as sales continue to fall,The Leeds-based supermarket group, which is expected to release its quarterly results next week, has continued to lose market share to rivals as sales have gone backwards, despite an effort to win over shoppers with price cuts and improved stores,Sales fell 3,9% in the three months to 2 November, according to data from Worldpanel by Numerator (formerly Kantar), which indicated a one percentage point drop in market share from a year before,Asda’s parent group slumped to a near-£600m loss last year as sales fell and the cost of servicing its debt pile increased.
Clive Black, a retail analyst at Shore Capital, said: “From the outside it looks like a sign of weakness that tangible fixed assets are being sold at this time.”He said the deal might help Asda to pay off debt or allow more capital to invest in the business but would also mean higher rents, meaning less cash for day-to-day operations.“If trading was hunky dory, that can be accommodated in the big scheme of things, but that is not the case.We had expected a more stable trading position from Asda by now,” Black said.“Recent market share data has been very poor for grocery.
It all feels rather tight.”Patrick O’Brien, an analyst at GlobalData, said Asda’s promise in March under its new chair, Allan Leighton, to stir up the market with a barrage of price cuts, did not appear to have hit home.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotion“There was a feeling that Asda were really going to bring out the big guns and we haven’t really seen that materialise,” he said.“We have not seen that aggressiveness on price as yet.”Nadine Houghton, a national officer for the GMB union, which represents thousands of the retailer’s workers, said there were concerns about Asda’s future in the light of the latest lease-back deal: “Asda’s owners, TDR Capital, is selling off yet more assets to settle the debt liabilities heaped on the business by its own borrowing.
Debt is up, lease liabilities are up, interest payments are up – but market share and staff morale are rock bottom.”Asda, which has 579 supermarkets, 517 Express convenience stores and 29 Asda Living general merchandise and fashion outlets in total, said it would continue to operate from the latest batch of stores to be sold off.They have gone to two buyers: DTZ Investors and Blue Owl Capital.The deal is part of plan to cut hefty debts at Asda since a highly leveraged £6.8bn takeover in 2020 by the billionaire Issa brothers and the private equity firm TDR Capital.
TDR now controls the group after buying out one of the brothers, Zuber Issa, while Mohsin Issa retains a 22% stake.Armarveer Singh, a credit analyst at CreditSights, said the deal would negatively affect Asda’s credit rating as it would increase leasehold exposure while the proceeds of the sale and leaseback would not be used for investment or cutting the group’s main debts.Bonds fell as it emerged that the money is to be used to pay off a debt to Walmart, the US retailer that previously owned Asda and retains a 10% stake, as first reported by the Financial Times.Asda previously sold most of its warehouses for £1.7bn in 2021, and 25 supermarkets for £650m two years later, in similar deals in which it agreed to lease back the properties.
It also signed a more unusual ground rent deal for £300m in 2023,An Asda spokesperson said: “Asda’s property strategy is centred on maintaining a strong freehold base while also taking a considered and selective approach to unlocking value from our estate where appropriate,These transactions reflect that approach, enabling us to realise value from the sites while retaining full operational control,”
Jon Stewart on Trump’s Epstein files flip-flop: ‘This dude is flailing’
Late-night hosts tore into the next chapter of Donald Trump’s never-ending Jeffrey Epstein scandal.Jon Stewart ripped into Trump on Monday evening after the president abruptly changed tack and called on House Republicans to authorize the justice department’s release of files related to Epstein, a convicted sex offender – files which Trump himself could order to be released.“If he had nothing to hide, he could have declassified and released these files himself at any time,” the Daily Show host explained. “How do I know this? A legal expert named Donald Jurisprudence Trump said so.”Stewart then played footage of Trump from 2022 in which he insisted that the president can declassify anything, at any time, just by saying so or “even by thinking about it”
North by Northwest: Hitchcock’s funniest, most ambitious film
Imagine: you’re a handsome and relatively successful ad man in idyllic 50s New York. You’re having a delicious mid-afternoon snack in the lobby of the Plaza hotel, which presumably cost all of $2.50, when suddenly you are abducted in broad daylight at gunpoint by two polite and well-dressed men. You don’t put up a fight. You merely walk with them to their car, trying to object in the only way you know how: asking nicely for them to stop
David Nicholls to adapt The Secret Diary of Adrian Mole Aged 13¾ for BBC
A writing team led by the One Day author, David Nicholls, and that includes Caitlin Moran is bringing Sue Townsend’s The Secret Diary of Adrian Mole Aged 13¾ to the small screen in a 10-part BBC One adaptation of the classic tale of teenage life in British suburbia.Nicholls, who described the book as “a classic piece of comic writing and an incredible piece of ventriloquism on Sue Townsend’s part”, will adapt the book that produced one of the best-known literary creations of the 1980s.Known for Mole’s comically dramatic assessments of his life in a Midlands cul-de-sac – “I feel like a character in a Russian novel half the time” – the book sold 20m copies worldwide and was translated into 30 languages.The BBC said: “With only a multi-coloured ballpoint pen as his guide, Adrian worries about his spots, his parents’ divorce, the torment of first love and the fact he’s never seen a female nipple.”None of the cast has been revealed, and producers say “a nationwide … search is currently underway to find Adrian”
‘People still blame me for their perforated eardrums’: how we made the Tango ads
‘Gil Scott-Heron did the closing voiceover. He was giggling away, saying, “You English guys are crazy!”’My creative partner Al Young and I had been on the dole for 18 months when we landed our dream jobs at Howell Henry ad agency. We had to prove ourselves fast. Tango’s brief was basically to get talked about. They told us: “We want Coca-Cola to be afraid of this little British brand
Memoirs, myths and Midnight’s Children: Salman Rushdie’s 10 best books – ranked!
As the author publishes a new story collection, we rate the work that made his name – from his dazzling Booker winner to an account of the 2022 attack that nearly killed him “It makes me want to hide behind the furniture,” Rushdie now says of his debut. It’s a science fiction story, more or less, but also indicative of the sort of writer Rushdie would become: garrulous, playful, energetic. The tale of an immortal Indian who travels to a mysterious island, it’s messy but charming, and the sense of writing as performance is already here. (Rushdie’s first choice of career was acting, and he honed his skill in snappy lines when working in an advertising agency.) Not a great book, but one that shows a great writer finding his voice, and a fascinating beginning to a stellar career
High art: the museum that is only accessible via an eight-hour hike
At 2,300 metres above sea level, Italy’s newest – and most remote – cultural outpost is visible long before it becomes reachable. A red shard on a ridge, it looks first like a warning sign, and then something more comforting: a shelter pitched into the wind.The structure stands on a high ridge in the municipality of Valbondione, along the Alta Via delle Orobie, exposed to avalanches and sudden weather shifts. I saw it from above, after taking off from the Rifugio Fratelli Longo, near the village of Carona – a small mountain municipality a little over an hour’s drive from GAMeC, Bergamo’s Galleria d’Arte Moderna e Contemporanea – the closest access point I was given for the site visit.The Frattini Bivouac is not staffed, ticketed or mediated
Boris Becker: ‘Whoever says a prison life is easy is lying – it’s a real punishment’
‘Never, ever give up’: fighting for Afghanistan’s sporting future in shadow of the Taliban
Former Rhondda roofer Harri Deaves to make Wales debut against the All Blacks
Revealed: sports agent Jonathan Barnett’s three-year legal battle with John Regis and Jennifer Stoute
Welcome to the Ashes, the classic cricket rivalry that never really starts or stops
Lewis Hamilton defends work ethic after Ferrari chief’s ‘talk less’ rebuke