Walmart has confirmed that it is considering third-party investment in its UK-based Asda business, following what it said is 'inbound interest' from outside parties.
The group reiterated that it believes an IPO is an 'attractive long-term objective' for the UK business, which was the subject of a failed takeover bid from rival Sainsbury's last year.
'Clear Strategy'
In a statement, Walmart and Asda said, "Asda is a great business with a clear strategy for the future and Walmart is committed to ensuring it has the resources and support it needs to deliver that strategy.
“Following inbound interest, Walmart and Asda can confirm that we are currently considering whether there is an opportunity for a third party to invest in Asda, alongside Walmart, in order to support and accelerate the delivery of Asda’s strategy and position Asda for long term success."
'Interested Parties'
The retailer confirmed that it is in discussions with a 'small number of interested parties' about a possible investment, however it did not elaborate further on this.
“No decisions have been made and we will not be commenting further on these discussions," it said. "If or when we decide to pursue this opportunity further our first priority will be to share more detailed information with our colleagues.”
It did note, however, that Walmart's international strategy revolves around a ‘strong local businesses, powered by Walmart’ positioning, which involves a "number of different ownership arrangements depending on the needs of its different markets".
Non-Food Challenges
In its most recent quarter, Asda posted a 1.3% decline in like-for-like sales, citing challenges in its non-food division, particularly clothing.
However, despite this, Asda has been active in ensuring its stores are fit for the future, announcing tie-ups with Claire's Accessories and Sushi Daily, as well as bakery firm Greggs, to repurpose excess space in its stores.
"This should provide confidence in Asda’s ability as a standalone retailer as it looks to spin off from Walmart and IPO in 2021/22," Thomas Brereton of GlobalData commented earlier this month.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine
