Somerfield buyers sell off Kwik Save brand

The new owners of Somerfield cut their losses on the Kwik Save chain by selling the brand and the majority of its stores today.

A total of 102 shops will be rebranded as Somerfield and operated as convenience stores on the high street, while 171 have been sold for an undisclosed sum to a new company specifically set up to operate Kwik Save.

It is believed that Richard Kirk, chief executive of discount clothing retailer Peacock since it was taken private last year, was the driving force behind the deal for the surplus stores.

Somerfield said a further 77 stores have been sold to other retailers - thought to include discount chains Netto, Lidl and Aldi.

The firm has been owned by a consortium including property tycoon Robert Tchenguiz, private equity firm Apax and investment bank Barclays Capital since succumbing to a £1.1bn (€1.6bn) takeover bid late last year.

A company spokesman said Kwik Save had lost millions of pounds over the past four or five years despite investment totalling £130m (€190m).

A new management team under former Asda managing director Paul Mason was recently parachuted in by Somerfield to oversee the restructuring of the business.

The firm will focus on positioning itself as a leader in the convenience store market and will not go head-to-head with Tesco in a bid to be number one in groceries, the spokesman added.

It is believed that Somerfield, which will now have an estate of 1,100 stores, was losing around £20m (€29m) a year on account of unprofitable Kwik Save outlets.