Dobbies Garden Centres sold by Tesco for £217m

Supermarket giant Tesco has sold Dobbies Garden Centres less than ten years after taking over the Midlothian-based chain.

Tesco took over Dobbies in 2007. Picture: Gordon Fraser

Tesco said it would receive £217m in cash for the business from an investor group led by private equity firms Midlothian Capital Partners and Hattington Capital.

Chief executive Dave Lewis said: “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.

“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.”

Lasswade-based Dobbies, which employs more than 2,700 people, was acquired by Tesco for £155.6m in 2007. The chain has 35 stores across the UK, making it the UK’s second-largest garden centre retailer.

In a joint statement, Andrew Bracey of Midlothian Capital Partners and Barney Burgess of Hattington Capital said: “We are delighted to have been chosen by Tesco to take ownership of the Dobbies Garden Centres business.

“It is a great business with fantastic colleagues. 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.”

Burgess is a former commercial director Tesco, while Bracey was chief financial officer of recruitment group Michael Page and online grocer Ocado before founding Midlothian Capital Partners, which despite its name has offices in London and Connecticut.

Dobbies delivered £17m in profits to Tesco last year and its gross assets included in the supermarket’s accounts were £255m as of 27 February.

The sale comes a week after Tesco said it was offloading its Giraffe restaurant chain to Harry Ramsden’s owner Ranjit Singh Boparan and selling its Turkish operation to Swiss retailer Migros.