Asda is selling its loss-making photography business to Photo-Me International for approximately £ 5.4m in cash as the supermarket chain reduces the number of services it offers directly in its stores.
Photo-Me will buy 191 Asda photo centers and 172 self-service kiosks and operate the supermarket’s online photo processing service. It will pay £ 3.35 million for the deal and also buy about £ 2 million of shares.
The world’s largest photobooth operator will manage the sites as concessions in stores and pay commissions to Asda for 10 years. Photo-Me employees will work for Photo-Me after the contract is signed in October.
Asda is eliminating surplus services like in-store pizza making to reverse the decline in sales in its main grocery store. The Walmart-owned chain faced intense competition from Aldi, Lidl and a revitalized Tesco in an ongoing price war between grocers.
Asda had already planned the photo processing for the chop. Photo-Me announced in April that it was interested in buying the company, which lost £ 3.4m last year on sales of £ 19.3m. Photo-Me expects to increase sales by installing better equipment, revising layouts, and introducing new products.
Serge Crasnianski, CEO of Photo-Me, said: “This is an exciting opportunity to significantly expand our business in the UK in a strong number of locations and to increase our market share in the digital photo printing market, which we believe has growth potential in the digital space is old. “
Photo-Me’s main business is the operation of photo booths and digital printing kiosks. It is traded in 17 countries and has 6,600 photo booths in the UK. Underlying pre-tax profit rose 15% last year to a record £ 40.1 million, helped by demand for photos for an ID card in Japan.