German retailer Tengelmann does not plan to be a shareholder in A&P when the US retailer emerges from Chapter 11 bankruptcy.
A spokesperson for Tengelmann today (14 July) that the company “does not plan to re-invest” in A&P after the retailer leaves bankruptcy protection.
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Tengelmann owns around 38% of A&P but has written the value of its stake. The spokesman said Tengelmann indicated that the firm did not have complete faith in A&P’s turnaround plan. “They have to bring out a new concept. It is not the right concept,” the spokesperson said.
A&P filed for Chapter 11 in December after the 2008 acquisition of fellow US retailer Pathmark – and competition from the likes of Target Corp. and Wal-Mart Stores – put financial pressure on the company.
The retailer made a series of executive changes and closed stores before applying for Chapter 11 and, since attaining the protection, has made similar moves, putting more outlets up for sale and naming a clutch of marketing and merchandising executives.
Tengelmann chief executive Karl-Erivan Haub yesterday told reporters that the retailer hoped A&P could be “led out of its insolvency”, Reuters reported. However, he added: “We do not believe that we will be significant shareholders after the process ends.”
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By GlobalDataAccording to Reuters, Tengelmann CFO Juergen Boeckel noted: “A&P is currently in freefall.”
Yesterday, Tengelmann, which owns the German supermarket chain Kaiser, reported a 4.1% rise in sales in 2010 to EUR10.52bn (US$14.90bn). The company, which also owns discount clothing chain Kik and DIY retailer OBI, said sales from its Kaiser business were up 0.1% at EUR2.16bn.
The spokesperson said sales from Kaiser were affected by the disposal of 85 stores and a programme to remodel its outlets.
Tengelmann does not disclose its profit numbers.
