A Huddersfield town centre food shop is set to change hands – as Morrisons calls time on its foray into the convenience store sector,
The M local store at King Street, which has about 20 staff, is expected to be among 140 M local outlets which Bradford-based Morrisons has agreed to sell for £25m cash.
Staff at the stores will transfer with the business to the new owners, a team led by retail entrepreneur Mike Greene and backed with finance from Greybull Capital.
Morrisons will keep five M local stores, which are either on forecourts or will be converted to small Morrisons supermarkets.
The company said it had not yet published the list of stores to be sold as the first priority was to talk to those colleagues affected.
A statement to the stock exchange said: “On March, 2015, Morrisons announced a review of the M local business. That review concluded that M local would have required significant further investment in new sites, plus additional capital expenditure and lease commitments, to reach profitability.
“In the Board’s opinion, today’s sale announcement represents the best solution for Morrisons and will enable future Morrisons investment to be focused on core supermarkets.”
Morrisons, which has supermarkets at Waterloo and Meltham, expects to incur a £30m loss on the sale of its M local stores.
In addition, it retains a guarantee on individual lease obligations, which could revert to Morrisons if the new business does not succeed – a liability estimated at up to £20m.
Latest results show that the M local stores to be sold recorded an operating loss of £36m in 2014-15 with assets of £68m. For 2015-16, the stores’ budgeted loss was £23m.
Morrisons opened its King Street store on March 17, 2014, when representatives of Kirkwood Hospice and Huddersfield Giants were in attendance. The premises were previously occupied by BurgerKing, which pulled out in October, 2013,
Mike Greene, who has appeared on TV’s Secret Millionaire, has previously held senior posts with retail businesses Spar and McColl’s. He has also served as chairman of the Association of Convenience Stores and the Association of News Retailers.