Laurus continues to struggle but sees hope following Casino deal

Laurus, the second largest Dutch retailer behind the giant Ahold group, has at least one thing in common with its nearest rival - both have posted losses in their latest financial results. But while Ahold's second quarter slide into the red was seen as temporary glitch, the situation with Laurus was more worrying - the losses of €44 million were a repeat of those posted in the same period in 2001.

Ahold's losses were caused by the unexpected collapse of its Latin American joint venture, but Laurus attributed its prolonged stay in the red to failure of its revamped Konmar fascia in the Netherlands and to losses in Spain and Belgium. There was a better performance from Laurus' two other Dutch chains, Super de Boer and Edah, but this was not enough to offset the difficulties elsewhere.

Overall sales reached €2.87 billion, 11 per cent down on the previous year due to the disposal of the Spar chain in January, the closure of the Basismarkt discount chain and a poor performance in Spain and Belgium. Dutch sales were ahead 0.7 per cent to €2.1 billion, with the sale of 50 outlets impacting sales. Like-for-like sales at Super de Boer and Edah were ahead 9.5 per cent and 3.6 per cent respectively.

Sales in Spain, meanwhile, were down 14.7 per cent due to the sale or closure of 62 stores and poor stock levels caused by supplier reticence in the light of the uncertain future of the chain. Sales in Belgium were 10.4 per cent down to €293 million, again due to a reduction in the number of outlets.

The last few years have been difficult for Laurus, all the more so because of the success of Ahold, but the company said it was confident that the worst of its problems - such as poor national distribution - were behind it and that the second half of the year would see an improvement, not least following the sale of a 38 per cent stake in the group to French counterpart Casino as part of a rescue plan.

A €950 million line of credit destined to restructure the businesses in Spain and Belgium has also been established, though the company will clearly be cautious about how it goes about this operation given the spectacular failure of its efforts with Konmar. Meanwhile, the pace of recovery of the Dutch supermarket operations will depend on the progress made in terms of cost control and improving IT systems. The second half might see some improvement, but the likelihood is that the situation will get worse before it gets better.