Asda considers spinning off George clothing line
Asda's new owners are considering a spin-off of the supermarket's George fashion business, it has been reported.
Mohsin and Zuber Issa and investment funds managed by TDR Capital completed their £6.8bn takeover of the grocer earlier this month; it had previously been owned by US giant Walmart, which retains a minority stake.
The Issa brothers are said to believe the fashion brand, which was founded by fashion retail entrepreneur and founder of Next George Davies in 1990, is outside of their area of expertise.
According to The Times, the pair would be more comfortable continuing with the brand on a licensing basis to free up more space in stores. They have already confirmed they are pursuing a partnership strategy that would result in more third party brands, including Accessorize and Claire’s Accessories, introduced into stores.
The Issa brothers made their name in the petrol station business and have already said they will be selling Asda’s petrol forecourt business to their own EG Group for £750m.
George at Asda was a trailblazer for fashion in supermarkets, offering trend-led pieces at value prices, and gave rise to a new sector that went on to include Tu at Sainsbury's, F&F at Tesco and Nutmeg at Morrison's.
At the time of the announcement of the deal to buy Asda in October 2020, the Issa brothers and TDR pledged to invest £1bn in the business over the next three years. They also committed to maintain staff levels and keep prices low for customers.
The Issas said at the time: “We are very proud to be investing in Asda, an iconic British business that we have admired for many years.
“Asda’s customer-centric philosophy, focus on operational excellence and commitment to the communities in which it operates are the same values that we have built EG Group on.
“Asda’s performance through the Covid-19 pandemic has demonstrated the fundamental strength and resilience of the business, and we are excited to support [CEO] Roger [Burnley] and his team as they continue to reposition the business to drive long-term growth.”