Iceland Foods has sold its Cooltrader business to frozen food rival Heron Foods to focus on its core brand.
The deal will see Heron purchase the Cooltrader name, 54 of its 58 stores and all of the stock in stores. Iceland will retain four stores. The deal, for an undisclosed sum, is expected to be completed within four weeks.
Founded by Malcolm Walker and Cooltrader MD Andy Errington in 2001 from a single store in Wrexham, Cooltrader was acquired by Iceland in 2005 when Walker returned to the business. In the year to 31 March 2012, pre-tax profits rose 153% to £1.1m on sales up 12% to £53.8m.
“Following our MBO earlier this year, it is right that we should focus all our efforts on the growth and the development of the Iceland brand, which has huge further potential both in the UK and overseas,” said Iceland CEO Malcolm Walker.
“Cooltrader is a profitable business, but it’s a small part of our operations and one that offers only limited opportunities for future growth.”
Errington said he had mixed feelings about the sale, but he was proud of what Cooltrader had achieved over the last 11 years.
“It’s a hugely slick and successful operation that stands up to anyone in the value sector, if not better,” he added. “I am sure they can learn a lot from the way Cooltrader operates. We have gone from zero to 58 shops.”
Heron is currently in discussion with Cooltrader store employees as well as 76 warehouse and head office staff. Errington confirmed he would be leaving.
“I’m the MD of a very successful business, so I will be using those skills, I just don’t know the role yet,” Errington added.