Asda plans to offload 20 stores in £400m deal to raise cash

Asda is reportedly set to sell around 20 supermarket stores in a bid to raise £400m as it aims to generate more cash for the business, according to the Telegraph. 

The news comes amid reports first published by Green Street News, that Asda plans to offload the stores and lease them back for around 20 years. 

The group has appointed property adviser Eastdil Secured to seek new buyers. 

The news comes as the supermarket grapples with £3.8bn of debt, following its £7bn acquisition in 2021 by private equity TDR and the Issa brothers. 

Both brothers Zuber and Mohsin Issa stepped down from their roles as chief executives, and appointed former Asda CEO Allan Leighton as the new chair to turn the business around. 

While Leighton is actively looking for a new CEO, he warned that Asda’s profits will suffer a “material hit” this year to fund that investment drive, along with cuts to jobs and bonuses. 

Despite that, the Telegraph has learnt that Leighton is relaxed about the company’s balance sheet as long as it doesn’t restrict investment in the business. 

According to Asda’s latest trading update for the year to 31 December 2024, the group’s total revenue declined by 0.8% to £21.7bn in FY24, while like-for-like sales (excluding fuel) were lower by 3.4%.

However, Asda saw adjusted EBITDA after rent increase by 5.8% to £1.14bn during the year, driven by improved gross margins. 

Its market share also stabilised with 0.3% rise to 12.6% since December.

An Asda spokesman told the Telegraph: “Sale-and-leasebacks have been a feature of the retail industry for many years.

“While maintaining a strong freehold base remains central to Asda’s property strategy, we will consider suitable opportunities to unlock value from our property portfolio as part of our material programme of investment into the business.”

Retail Sector has also contacted Asda for comment.