Xtra-vision held talks with Tesco on disposing of stores

FILM RENTAL group Xtra-vision is believed to have held discussions with retail giant Tesco about offloading a large number of its 200 sites around the country to the multiple for use as small supermarkets or convenience stores.

It is understood, however, that the talks resulted in just one site in Dublin being identified by Tesco as being suitable for one of its outlets.

Negotiations on this location are believed to be ongoing.

It is understood that Xtra-vision's offer was one of more than 300 proposals received by Tesco recently on foot of an advertisement placed in the national media seeking potential new sites around the country.

The retailer declined to comment on this process.

Xtra-vision, which employs more than 1,600 staff on the island, has stated publicly its intention to pull back from suburban locations in favour of outlets on the high street or in shopping centres.

A number of Xtra-vision rental stores in suburban locations have already closed. The company, which operates from about 50 sites in Dublin alone, is believed to have considered several potential avenues for offloading its properties.

Most of these are believed to be held as leasehold properties.

This move reflects a change in the mix of Xtra-vision business, which has moved away from traditional DVD or video rental to include the sale of mobile phone handsets and top ups, electronic gadgets and games consoles.

Less than half of Xtra-vision revenue is now thought to derive from DVD or video rental. This business has declined as films have become available to purchase over the Internet and the cost of buying DVDs in retail outlets, including Tesco and other supermarket chains, has become considerably cheaper.

Xtra-vision is owned by Blockbuster, which has more than 8,000 rental and entertainment stores throughout the Americas, Europe, Asia and Australia.

Tesco is Ireland's biggest supermarket group with sales of around €3 billion expected this year. It has a market share of about 26 per cent here, placing it ahead of Dunnes Stores, Musgrave's SuperValu chain and Irish-owned Superquinn.

The British retailer has close to 100 stores in the Republic and a number of filling stations. It is known to be keen to expand its footprint here, particularly that of its Tesco Express convenience store chain.

The retailer recently opened an Express outlet on Camden Street in Dublin's city centre and plans to open other convenience stores at Parnell Street, Ringsend and Inchicore in the capital.

No comment was available from Xtra-vision.