Laurus sell-off attracts Dutch rivals

By Anita Awbi

- Last updated on GMT

Related tags: Laurus, Supermarket

Following years of poor performance Dutch retailer Laurus has
announced it will sell its two largest supermarket chains,
attracting interest from acquisitive domestic and foreign rivals.

With 700 stores Laurus is one of Holland's chief retailers, but has been struggling with disappointing results and diminishing margins for years.

Intense price pressure from competitors Ahold and Schuitema has eaten into profits, restricting financial scope and forcing the sale of key business assets.

The firm will now sell its Edah and Konmar supermarkets, in a move seen by many as strategic withdrawal from the ongoing price war first initiated by Ahold in 2003.

Reports in the Dutch national press indicate Schuitema, which is 73 per cent owned by retail giant Ahold, is interested in purchasing Konmar.

And Ahold is rumoured to be interested in snapping up stores to incorporate into its Albert Heign flagship, but competition laws may come to bear if the company tries to buy up too many.

Belgian discount group Colruyt, may also be looking to capitalise on Laurus' misfortunes. Colruyt director Luc Rogge told Belgian daily De Tijd the company was taking a serious look at the case, with a view to buying into the Dutch market.

Laurus had been undergoing a major reshuffle following years of poor results, but admitted the action taken had not been adequate.

"Although the new positioning Edah and Konmar stores has yielded a significant improvement in sales, profitability is not expected to reach a satisfactory level in the near future, due to the unrelenting pressure on margins,"​ Laurus said in a statement.

The company claims the two chains are no longer sufficiently profitable, and will instead concentrate on its Super de Boer supermarkets.

Laurus, which is partly owned by France's Casino group, will pump €36 million into the remaining 380-strong chain to rejuvenate the brand, helping it compete in the tough food retail sector.

Meanwhile having successfully driven rival Laurus out of the running, Ahold comfortably holds the retail top spot in Holland, in an industry worth €29 billion according to Mintel.

Related topics: Market Trends

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