Tesco sells 35 Dobbies garden centres for £217m to focus on supermarkets

The company’s financial position has been weakened by a price war in the UK

Tesco said it will continue to offer customers home and garden products through its own stores and online (AFP)

Tesco Plc agreed to sell its Dobbies Garden Centres chain for £217m as the UK’s biggest retailer continues to sell peripheral assets to focus on reviving its main supermarket business.

Dobbies, which operates 35 garden centre stores across the UK, will be bought by an investor group led by Midlothian Capital Partners and Hattington Capital, Tesco said in a statement on Friday.

“It was a difficult decision to sell the business, but we believe this agreement will give Dobbies a bright future, while allowing our UK retail business to focus on its core strengths,” chief executive officer Dave Lewis said.

The sale is another step in Lewis’s efforts to recapture Tesco’s investment-grade credit rating. The company’s financial position has been weakened by a price war in the UK, coupled with onerous leases on stores and pension obligations. Last week, Tesco agreed to sell its Turkish grocery business Kipa and restaurant chain Giraffe.

Tesco, which has owned Dobbies since 2007, said it will continue to offer customers home and garden products through its own stores and online.

© Bloomberg L.P.