Battling Tesco could buy back Ludlow store

The town's Tesco store could be among the first to be bought back by the company after it sold nearly 70 of its supermarket buildings off to other owners and then leased them back to free up money invested in the properties.

The struggling supermarket chain is in talks with Legal & General over buying back the store in Corve Street, along with branches in Quinton, Birmingham and Market Deeping in Lincolnshire.

If completed, it would mark the start of a reversal of the sale and leaseback programme undertaken by former boss Philip Clarke, which saw a total of 68 stores sold off to raise £2.7 billion. Tesco sold the three stores for £46.6 million in 2011 and instead set up a 20-year lease to free up millions of pounds to help fund its global ambitions.

But the company has been forced to take drastic action to turn around its finances after it was hit by an accounting scandal in 2014 in which the group overstated last year's expected first-half profits by about £250 million.

Olivia Goodall, PR manager at Legal & General, confirmed the firm was in talks to hand back the Ludlow store, which was built at the turn of the millennium, to Tesco.

She said: "When we bought it there was 'buy-back' clause for five years that they put into the deal, as long as they give 12 months notice."

She said Tecso gave notice about two months ago, and she expected the deal to take about another year to complete. "It's actually a store that we love because it trades really well. The fact that they want to buy it back is probably because of that," she said.

Richard Sheehan, chief executive of Shropshire Chamber of Commerce, said it was encouraging to see such interest in a local store.

He said: "It's good to see that a major supermarket chain continues to desire a presence in one of our market towns, because it demonstrates that they are thriving."