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Wed 10th Feb 2016 - Tesco takes full ownership of Harris + Hoole despite £43.5m total losses
Tesco takes full ownership of Harris + Hoole despite £43.5m total losses: Tesco has taken full ownership of the loss-making Harris + Hoole coffee shop business, despite total losses of £43.5m since incorporation. The company has bought out founders, the Tolley siblings, who left the business just over six months ago. It is not known how much Tesco paid for the 51% stake held by Andrew, Nick and Laura Tolley – turnover stood at £12.8m in the most recent year. A spokesman said Tesco said had exercised an option to take control of Harris + Hoole that had been part of the original deal with the Tolleys three years ago. “We have worked successfully with Harris+Hoole since investing in the business three years ago and will continue to partner with the management board in the future,” the spokesman said. The deal ends the debate over the future of Harris + Hoole, which some industry watchers expected to be sold off as part of Tesco’s turnaround efforts since Dave Lewis became chief executive almost 18 months ago. The stake in Harris + Hoole was acquired by former Tesco boss Phil Clarke as part of his efforts to revive the fortunes of the chain’s big out of town supermarkets. Harris + Hoole now has 43 outlets, including 29 in Tesco stores, and employs more than 500 people. Tesco also owns the Giraffe family restaurant chain where losses increased to £4.1m in the year to 1 March 2015. That business also looks set to remain part of the supermarket business as Tesco said it remained focused on growing the business. In November, Harris + Hoole reported total losses had reached £43,583,894. It did, however, report the majority of its shops have turned to profit now although its losses more than doubled to £25,573,368 for the 52 weeks to 1 March 2015 – it lost £12,799,795 the year before. The losses for the most recent year were also circa double turnover of £12,840,302, which was up from £6,648,270 the year before. Former Mitchells & Butlers chief executive Adam Fowle joined the board on 21 July last year. Of the year, the company stated: “The business opened 22 new shops and closed the six shops previously announced in September 2014, taking the total open at the end of the period to 45. In the second week of March, Harris + Hoole opened the first speciality coffee shop in a UK airport at Stansted, which has been exceeding expectations since it opened. The operating loss of £21.6m reflects significant impairment taken on a number of properties and other assets of £9.8m. As the business exited the year and into 2015-2016,the majority of shops have turned to profit after the early life-cycle of opening in the formative years of the business. Management focus on driving sales growth coupled with a tighter control on shop costs have driven this, as well as a marked decrease in the time from opening to profitability for the shops opened in the 53 weeks to 1 March 2015.” Tesco has pledged to provide a further £7.5m of funding to ensure the company meets its obligations – it will need £6m this year. Tesco has loaned Harris + Hoole £48m so far. The highest paid director earned £182,900. 


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