Tesco to sell Lifestyle to concentrate on food retailing

TESCO is to sell its Lifestyle sports shops in the Republic as part of a major restructuring programme.

The reorganisation is focusing initially on the Northern Ireland operations and will entail several hundred job losses there as the company is closing the former Stewarts head office in Belfast.

Tesco, which bought the Quinnsworth/ Crazy Prices and Stewarts supermarkets for Pounds 630 million earlier this year, has unveiled new plans for the North. They include selling 16 Lifestyle shops there. A further 39 Lifestyle outlets in the Republic will also be sold.

The company said yesterday the sale was part of its move to concentrate on it core business of food retailing.

The Lifestyle stores have annual combined turnover of Pounds 40 million and employ 310 people. Tesco wants to sell the outlets as a complete package. It is understood that a number of enquiries have already been received, but the sale could take three months.

Industry sources said yesterday that possible bidders could include Marathon Sports and Champion Sports, which run several successful outlets themselves. However, some sources cast doubt on this, saying that it may entail taking on too many stores for such operators. It is also possible that Dunnes Stores could be interested.

In general the outlets, which are located all over Ireland, are stand- alone units, attached to the supermarkets. In the North. a handful of the outlets are based within existing supermarkets and Tesco may relocate them to stand-alone units.

Tesco is to close the Stewarts head office in the North with the loss of 210 jobs. A spokesman for the group said this had already been planned by Associated British Foods, which had owned the supermarket chain. In fact, a spokesman said 93 of the redundancies had been announced by Stewarts earlier this year.

A new regional office will be located there instead, employing 46 people, and it is also setting up an information technology unit which will employ 25 people.

The Tesco spokesman said the employees would be entitled to apply for new jobs in Tesco's other operations. He said the company was reviewing all its operations, but it acted in the North first because of the speed at which competition was developing there.

Two weeks ago, Safeway announced a joint venture with Fitzwilton, which runs the Wellworth chain in the North. Safeway is the third largest supermarket group in Britain and is taking over Wellworth's 15 largest stores as well as four sites. It will be investing Pounds 77 million in the Northern operation and also plans to develop 20 stores in the Republic.

Tesco is also selling Kingsway Fresh Food, a pork processing plant which employees 180 people, as a going concern. It is also to close Daily Wrap, a potato packing operation based in Belfast and transfer it to other operators. It employs 32 people who will be offered alternative work.

It is understood that Tesco is also examining its operations in the Republic. It is believed the company will undertake a multi-million investment programme in its stores both North and South.

Tesco owns 35 supermarkets in the North and 76 supermarkets in the Republic. It also owns the Wine Barrel chain of off-licences in the North. The company had no plans to sell these outlets. the spokesman said.

Turnover of the stores in the North is Pounds 400 million sterling and gives the group an estimated 17.5 per cent of the market. In the Republic it has around 20 per cent of the market and the stores have an annual turnover of Pounds 900 million.