Asda sells off photo division to focus on sales slump
ASDAis set to sell off its photo division to concentrate on sales growth after it reported its worst-ever quarterly sales drop.
The Leeds-based grocer is selling Photo Division, which consists of 191 photo centres and 172 self-service kiosks in Asda stores to Photo-Me as it seeks to refocus the business.
In April, Photo-Me announced it was in discussions to acquire the business , which turns over £19.3m last year with losses of £3.4m.
It will now manage them under a ten-year concession, with Photo Division colleagues transferring to Photo-Me.
The deal is worth an initial £3.35m “subject to downward adjustment in certain circumstances” with an extra bill for consignment stock estimated at £2m. The deal will be completed by the end of October.
Serge Crasnianski, chief executive of Photo-Me, said: “This is an interesting opportunity to significantly expand our UK business in a strong set of locations and increase our market share in the digital photo printing market, which we believe has growth potential in the digital age.”
This comes following last week’s announcement of the supermarket’s worst-ever quarterly sales drop. Sales fell 7.5% excluding fuel according to US parent company Walmart.
According to Kantar Worldpanel results for the 12 weeks ending 14 August 2016, Asda suffered an unchanged 5.5% sales decline, with market share falling by 0.9 percentage points to 15.7%
Rival Yorkshire supermarket Morrisons has fared better following the appointment of chief executive David Potts last year. Sales have still fallen by 1.8%.
Across the sector, the grocery market grew at 0.3% as an upturn in the weather spurred consumers into increasing their spend according to Kantar.
