Asda owners consider George spin-off
The group has also reignited its interest in Caffè Nero
Asda’s new owners are reportedly considering spinning off George, the fashion label developed by George Davies, in an attempt to cut costs.
Industry sources told the Times that the Issa brothers and TDR Capital believe the brand is outside of their area of expertise.
While selling the brand outright could help to reduce the group’s debt, licensing George or introducing more fashion partnerships would utilise the supermarkets’ floor space.
Despite George’s online presence contributing to a combined net rise in sales of 76% at Asda.com and George.com in Q4 2020, its new owners have already set upon a path of partnerships.
Accessorize, Claire’s Accessories, and MusicMagpie have all recently been added to Asda’s larger stores, with interest in Caffè Nero also reportedly muted.
The Issa brothers have reportedly approached the lenders to the coffee chain in an attempt to buy a part of its £350m debt pile.
The transaction, first reported in the Sunday Telegraph, would allow the brothers’ ED Group, in partnership with TDR, to gain control through a debt-for-equity-swap if the chain was forced to restructure its borrowings.
While Asda’s owners have reportedly only held talks with Alcentra and Partners Group to buy loans worth £180m at the chain which operates over 800 sites and employs 6,000 staff in the UK, the brothers have promised to invest £1bn in their wider project over the next three years.
