Apr.17 - Britain's biggest retailer Tesco wrote down the value of its global operations by $3.5 billion and announced plans to exit the United States after annual profit fell for the first time in two decades. Hayley Platt looks at the problems facing the world's third largest retailer
++NOTE TO EDITORS - RESENDING CLARIFYING PROFITS OF ALMOST 3 BILLION DOLLARS++ The move into America was supposed to be a new chapter for Britain's Tesco. But Fresh & Easy never made a profit. Five years on the world's third biggest retailer is quitting the States. The $1.5 billion write-off contributed to Tesco's first annual profit fall in 20 years - it was down by a half to almost 3 billion dollars. Laurie McIllwee is Tesco's CFO. SOUNDBITE: Laurie McIllwee, Tesco Chief Financial Officer, saying (English): "We've given it every try that we could in terms of seeing if the U.S investment could be a success. It would get to profit and it would make a return but it would just take too long and there are many opportunities for Tesco to grow around the world that frankly will get a quicker and better return." Tesco opened almost 200 Fresh & Easy shops. Kantar Retail's Bryan Roberts says part of the problem was timing. SOUNDBITE: Bryan Roberts, Director of Research, Kantar Retail, saying (English): "They targetted two markets California and Arizona which was very severely hit by the sub-prime crisis which was obviously beyond Tesco's control and there's not been much they've been able to do about the economic conditions in which they've been forced to operate." But there were other write-downs too. $1.3bln on the value of UK property. And half a billion on businesses in Poland, Turkey and the Czech Republic. The debt crisis was the main problem in Europe and Tesco is partly tackling that by refocussing on the UK. SOUNDBITE: Laurie McIllwee, Tesco Chief Financial Officer, saying (English): "The UK's so important to us that we've got to build a better Tesco in the UK. We announced the investment of a billion pound of improving the shop trip for customers at the beginning of this year and a multichannel strategy which means we're going to build much more small stores, supermarkets and convenience stores and invest in the internet and not large stores." Tesco's fourth quarter performance in the UK was the best for three years. But even here there's been a slowdown in growth since Christmas. Shares - up 24% over the last three months - fell 2.5% after the results, valuing Tesco at just over $46bln.