Laurus draws line under Belgian losses

Related tags Laurus Netherlands

Laurus, the Dutch retail group, has finally withdrawn from the
Belgian market, the source of some of its biggest losses in recent
years. Six of its last eight stores have been sold to the Colruyt
group, with the two remaining stores due to be closed next month. A
major overhaul of the distribution and head office operations is
next on the agenda.

Colruyt​, the Belgian retail group, has acquired six stores operated by the Echo group - part of troubled Dutch retailer Laurus - which it will integrate into its own Spar Belgium business.

Colruyt did not say how much it had paid for the stores, confirming only that it would take over the outlets as of 1 October. The Belgian competition authorities will have to green light the deal.

The acquired stores consist of three Battard stores (Quaregnon, Sirault and Merchtem) and three Central Cash stores (Barchon, Barvaux and Wanze). Colruyt said that it hoped to transfer the outlets to independent Spar franchising partners in the short term.

Laurus now has just two remaining stores in Belgium - both Central Cash outlets, in La Calamine and Seraing - and these will be closed in the second week of October 2003, finally drawing a line under its loss-making Belgian venture.

Laurus sold most of its Belgian activities to Colruyt in April 2003 - 21 Battard shops and five Central Cash shops, a distribution centre and the administrative services in Pommeroeul, as well as the Spar business - while a further 20 stores were sold to Carrefour Belgium on 13 August.

The Dutch company has significantly overhauled its business over the last few years, withdrawing from all its foreign businesses (Spain and Belgium) in order to concentrate on building sales at its Dutch fascias.

But while the store disposal programme is now virtually complete, there is still much to be done. Laurus' market share in the Netherlands has declined, mainly as a result of the disposal of 258 Spar stores, the closure of Basismarkt (166 stores) and the sale of 81 stores to various parties including Sperwer, but the company's logistical operations are still tailored to the larger group, with the result that costs are still high.

As a result, Laurus announced earlier this month that it would reduce the number of employees at its head office from approximately 1,056 to around 840 by the end of the second quarter of 2004, and cut back on the number of jobs at its distribution centres, which will fall from 324 to around 255.

At the same time, distribution of some fresh produce and all 'slow movers' (grocery and non-food lines) to the Edah and Konmar/Super De Boer stores will be integrated, with the resulting closure of distribution centres in Apeldoorn and Hoofddorp and the termination of the fresh produce activities at the 's-Hertogenbosch centre by the end of the first quarter of 2004 at the latest.

The proposed measures are expected to yield total annual savings of €14-16 million, Laurus said, with the full effect seen only in 2005.

Meanwhile, Colruyt, which has been the main beneficiary of Laurus' restructuring in Belgium, continues to improve. The company has reported a 10.5 per cent increase in sales from its Colruyt shops in Belgium in the first five months of its financial year (April to August 2003), and it is already predicting a rise in consolidated group profit for the year from €134.4 million to €160 million.

Having significantly strengthened its Belgian units with the Laurus acquisitions, it is now looking to bolster its businesses elsewhere, in particular the Pro à Pro Distribution foodservice operations in France.

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