Morrisons M Local

Morrisons is reported to be in talks to sell its convenience store business to turnaround specialists Greybull Capital.

The sale would see the group take control of the roughly 150 convenience stores operated by the supermarket chain under the M Local brand. It would be one of the first major decisions on restructuring the business taken by new chief executive David Potts.

The Grocer reported in March that he had pushed the “pause button” on its c-store openings pending a review, and revealed that Potts felt there was not a need for someone is such a senior position on the management board with the departure of convenience MD Nigel Robertson.

The same month, Morrisons confirmed it was closing 23 M Local convenience stores with the loss of 300 jobs.

It said at the time: “Over recent years, we have been working to grow M Local at pace in order to quickly gain critical mass and learn. However, for stores now in their second year, we are not seeing the level of trading performance we had anticipated.”

According to The Daily Telegraph it is understood that Greybull, which saved travel group Monarch from bankruptcy last year, will provide tens of millions of pounds to fund the takeover and provide the stores with working capital. It also said that a deal is expected to be agreed within weeks.

The report suggested that M Local stores generate between £250m to £350m per annum and make a small profit.

Morrisons was late to the convenience store market and has been playing catch up in an attempt to gain critical mass.