Tesco pays £40 million to exit Japan
It also, once again, shines the spotlight on its Fresh and Easy business in America, which has still not made a profit for Tesco.
Tesco will sell 50pc of its shares in Tesco Japan to Aeon, the biggest retailer in that country, for a "nominal" sum. The two companies will then own the business as a joint venture, and Tesco will then put £40m into the business to pay for "restructuring". It is understood that this £40m payment will improve the chances of its 1,000 employees in Japan be transferred across to the new business.
After paying the money, "Tesco will have no further financial exposure to the Japanese business or its operations," the retailer said today. The remaining 50pc stake will be sold to Aeon at a later date.
Clive Black, analyst at Shore Capital, said: "Having to pay £40m to exit the market is a disappointment of sorts to our mind but it reveals the challenges of the Japanese market and caps the damage from what is a subscale business."
Source: www.telegraph.co.uk