Tesco has agreed to sell its Euphorium Bakery business for an undisclosed sum.

The Euphorium factory in Weybridge will now be operated by long-term supplier partner, Samworths. All in-store Euphorium bakeries will convert to Tesco bakeries in the weeks ahead.

Euphorium’s Islington factory and the associated high street artisan bakeries will be sold to casual dining operator Soho Coffee, which will take on the Euphorium brand and continue to develop it.

A Tesco spokesman told British Baker: “We know how important a great bakery offer is to our customers, and this agreement will mean we can continue to serve shoppers with great-quality Tesco bakery products. We will continue to be supplied by the Weybridge factory for some items.”

Euphorium was started in London in 1999 by Danny Bear. Tesco took a stake in the business in 2012 under CEO Philip Clarke and made a gentleman’s agreement to purchase the rest of the business, which it honoured, under present CEO Dave Lewis, in April 2015.

In 2013 it had begun a wider rollout until it reached 59 concessions in Tesco stores, six stand-alone outlets and a manufacturing bakery in Weybridge, Surrey.

When current Tesco CEO Davis Lewis took over in August 2014, he embarked on a strategy to reverse his predecessor’s purchases and disposed of ‘non-core’ businesses such as Harris + Hoole Coffee shops to Caffè Nero, Giraffe restaurant to Boparan and Dobbies Garden Centres to an investment group. Those sales all took place in June this year leaving just Euphorium awaiting a buyer.

In April this year, Tesco posted a £162m pre-tax profit for the year ending 27 February, a big swing from the £6.4bn loss posted in 2015, following heavy property write-downs.

The company also reported a first quarter of UK sales growth in three years with a 0.9% increase in UK like-for-like sales during its fourth quarter. So far Lewis has reduced the number of products on Tesco’s shelves by 18% and given over the space to best-selling lines.

The company has also reduced the number of multi-buy promotions by over a third as customers have shown their preference for lower prices.