(MENAFN- The Peninsula)
ISTANBUL: Tesco’s subsidiary in Turkey has decided to hang onto some of its stores instead of selling them to rival Turkish retailer Begendik after their performance improved strongly it said on Saturday.
Begendik’s chief executive said in September that the company planned to buy 10 stores from Tesco Kipa as part of expansion plans that could ultimately lead to a stock market listing.
“There is always a possibility that negotiations end without reaching a deal. The stores which were the subject of the deal are good stores with great colleagues and strong improvement in performance over the past six months” Tesco Kipa Chief Executive Bill O’Neill said in a statement.
“We didn’t feel the deal was right for Kipa” the statement said.
Begendik runs 46 supermarkets and 13 hypermarkets throughout Turkey. It aimed to almost treble sales to 1.5 billion lira ($500 million) in 2015 CEO Haci Begendik said in September.
Domestic players such as Begendik have benefited as international chains have pulled back from Turkey’s highly competitive retail market. Begendik bought 12 stores from German food retailer Metro AG in 2014.
Tesco Kipa’s parent Tesco Plc is cutting back in Turkey. The British retailer has 173 stores there but made a net loss of 574 million lira ($191 million) in the 2014-2015 financial year.
(Reporting by Asli Kandemir; writing by Nick Tattersall; editing by David Clarke)
Reuters