Morrisons is reportedly weighing up a sale of its Rathbones bakery manufacturing business as the supermarket continues to investigate ways to shrink its debt burden.
The group has tasked financial services giant Deloitte with exploring options for the 28,000 sq ft factory in Wakefield, according to The Telegraph.
The paper said the discussions were understood to be at an early stage and linked Hovis owner Endless as a potential buyer.
Morrisons picked up Rathbones in 2005 after the bakery collapsed into administration. Today, the factory employs 400 staff and operates 24/7 to produce a 47-strong range, including bread, hot cross buns, muffins, crumpets, pancakes, naans and pittas, for the supermarket. Annual revenues at the business top £60m, according to accounts at Companies House.
Neither Morrisons nor Deloitte have commented on the speculation.
Morrisons has made various promises not to sell off assets, including its manufacturing arm and its 18 factories, since being taken over by private equity firm Clayton Dubilier and Rice in 2021. But rumours about possible divestments have persisted as the chain has struggled to remain competitive with its rivals while paying hefty interest charges on its borrowings of more than £6bn.
New boss Rami Baitiéh told journalists last month during his first press conference since taking charge that its manufacturing operations were “unique”. “I really believe our Market Street, our manufacturing, our production centres, our relationship with 3,000 British farmers… are strengths and competitive advantages to Morrisons,” he said.
The comments followed Morrisons agreeing to sell 337 forecourts for £2.5bn to fellow CD&R company Motor Fuel Group in a deal designed to reduce debts.
Morrisons, which lost its spot as Britain’s fourth-biggest grocer to Aldi in 2022, last month reported annual like-for-like sales grew 1.8% to £14.9bn in the year ended 29 October 2023. The results represented the sixth quarter in a row that the supermarket has improved like-for-like sales.
No comments yet