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Morrisons agrees £25m deal to offload convenience stores

Published:  09 September, 2015

Morrisons has agreed a deal to sell 140 M Local convenience stores to a team led by retail entrepreneur Mike Greene and backed by Greybull Capital for £25 million.

Greene is chairman of online retailer Drink Supermarket and wholesaler HT & Co Drinks, a twice chairman of the Association of Convenience Stores and has appeared on Channel 4's The Secret Millionaire.

Morrisons will keep five M Local stores, which are either on petrol forecourts or will be converted to small Morrisons supermarkets.

The chain announced a review of the M Local business in March.

In an announcement to the City it said today: "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 expects to incur a loss on disposal of around £30 million.

The stores to be sold recorded an operating loss of £36 million in 2014/15 and the budgeted operating loss for the current financial year was £23 million.

Chief executive officer David Potts said: "Convenience is a large and growing channel in UK food retailing.

"Morrisons learnt much from its entry into the market, but M Local was unable to scale.

"However, we remain open to other opportunities in convenience in the future."