Tesco is facing a bill of around £1bn to exit the US after chief executive Philip Clarke decided to call time on its Fresh & Easy business.
The UK’s largest retailer is set to write down the value of its assets including its wholly-owned stores, leases and a major distribution centre in Riverside, California, The Telegraph reported.
Clarke is understood to be in talks with a number of parties, including Aldi, over a sale of the whole business. However, closing the chain and selling off the assets appears more likely.
The £1bn bill – equal to the amount set aside for investment in reviving the core UK business over three years – ends a six-year stint in the US following Fresh & Easy’s launch under former chief executive Sir Terry Leahy in 2007.
Clarke is expected to outline headline plans for the disposal of Fresh & Easy at the retailer’s full-year results next week and include an impairment to take losses at Fresh & Easy into account.
In December, Clarke hired investment bank Greenhill to conduct a strategic review of Fresh & Easy after stating that the business “will not deliver acceptable shareholder returns in an appropriate timeframe in its current form”.