Tesco turfs Dobbies out to investor group

Retail giant Tesco confirmed the sale of its Dobbies Garden Centres chain on Friday, to an investor group led by Midlothian Capital Partners and Hattington Capital.

The FTSE 100 firm said the sale represents the entire share capital of Dobbies, with Tesco receiving £217m in cash to be used for general corporate purposes.

Tesco purchased Dobbies Garden Centres in 2007, and has grown it to become the UK’s second-largest specialist garden centre operator with 35 sites across Scotland, England and Northern Ireland.

“Through their hard work and dedication to customer service, Dobbies colleagues have built a great business, and I would like to thank them for everything they have done, said Tesco chief executive Dave Lewis.

“It was a difficult decision to sell the business, but we believe this agreement will give Dobbies a bright future, while allowing our UK retail business to focus on its core strengths.”

Andrew Bracey and Barney Burgess, of Midlothian Capital Partners and Hattington Capital respectively, expressed their delight at taking ownership of the Dobbis business.

“It is a great business with fantastic colleagues,” they said in a joint statement.

“We're very optimistic about the potential of the business, and we look forward to growing the business across the UK from its base in Scotland.”

Gross assets relating to Dobbies Garden Centres, as included in the Tesco accounts on 27 February, were £255m, and Dobbies made a contribution of £17m to Tesco’s reported profit before tax for the year to 27 February.

Tesco said it will continue to offer a “wide selection” of home and garden products through its own stores and online.