Supermarket chain Asda is selling 24 of its stores and will rent them back as it struggles with its debt mound.
There will be no change to the shops, nor its Lutterworth depot, which has also been sold with a leaseback agreement, Asda said.
But the GMB union has criticised the move as “asset stripping” by the private equity-owned chain and said staff morale is being hurt.
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Private equity firms acquire businesses, invest to improve their financial performance and seek to then sell them for a profit.
The GMB’s national officer Nadine Houghton said, “Debt is up, lease liabilities are up, interest payments are up – but market share and staff morale are rock bottom.”
“GMB members working on the shop floor and in distribution continue to report declining health and safety standards and increased stress levels brought about through asset stripping.”
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Ownership
Asda was acquired from Walmart by billionaires Zuber and Mohsin Issa, backed by TDR Capital, in 2020 for £6.8bn.
The supermarket had £3.8bn in net debt at the end of 2024, the same as at the end of 2023, its latest full-year accounts show.
Asda’s ownership had been subject to political scrutiny in recent years.
MPs on the Business and Trade Select Committee raised the issue in hearings in July and December 2023.
The company’s labyrinthine corporate structure was the subject of questions from MPs, as there are 16 different entities between the owners and the supermarket operating company, many of them registered offshore.
Supermarket chain Morrisons is also owned by private equity. Just over a year ago, it struck a £370m deal to unlock value from its property portfolio as it sought to shrink its debt pile.
What’s happening to the Asda stores?
Two separate buyers have been found for the shops: four – Small Heath in Birmingham, Colindale in London, Coventry Abbey Park and Killingbeck, Leeds- have been sold to real estate manager DTZ Investors and leased back.
Twenty shops and the Lutterworth depot have been sold to private credit group Blue Owl Capital and also leased back.
The leases will last 25 years with an option to renew for an extra 10 years.
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The transactions have raised £568m, an Asda spokesperson said.
“Asda’s property strategy is centred on maintaining a strong freehold base while also taking a considered and selective approach to unlocking value from our estate where appropriate.
“These transactions reflect that approach, enabling us to realise value from the sites while retaining full operational control.”
