NORWAY: ICA to offload Maxi stores
Sweden-based retailer ICA has decided to quit the hypermarket channel in Norway to focus on its supermarket and discount stores.
ICA, in which Dutch retail giant Ahold owns a 60% stake, will sell 24 Maxi stores in Norway. The stores employ around 1,500 staff.
The retailer said the move would allow it to focus on its Rimi discount chain and its ICA Supermarket network.
President and CEO Kenneth Bengtsson said: "In recent years, we have implemented a number of measures to reverse ICA Norway's negative results.
"A key point has been the launch of the new Rimi concept, which has generated marked sales increases. We have also initiated a successful modernisation of our ICA Supermarket stores. Now we choose to fully focus on these formats."
The announcement coincided with the release of ICA's half-year results. The retailer's operating income, excluding capital gains and impairments, for the first six months of 2011 amounted to SEK1.21bn (US$192.5m), down 7% on the year.
Net income was SEK686m, up from SEK55m a year earlier when ICA reported a one-off tax charge of SEK747m.
First-half net sales were up 0.8% at SEK46.25bn. At constant exchange rates, net sales increased 3.4%.
ICA did see some improvement in operating income and net sales the second quarter of the year. Operating income, excluding capital gains and impairments, was up 5.1% at SEK723m. Net sales increased 5.3% to SEK24.37bn. When the impact of foreign exchange is removed, net sales were up 7.3%.
Mr Bengstom added: "During the second quarter, our markets were still characterised by stiff competition and a lower growth rate. In spite of this, the ICA Group's sales continued to rise during the quarter, climbing 7.3 percent at constant exchange rates.
"The group's operating income improved during the second quarter due to strong operating income in Rimi Baltic, ICA Bank and ICA Real Estate, partially offset by a decrease in operating income at ICA Sweden and ICA Norway."
ICA has around 2,150 of its own and retailer-owned stores in Sweden, Norway, Estonia, Latvia and Lithuania.
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