Ahold to exit Slovakia

Ahold to exit Slovakia

Ahold has reached a deal to sell its Slovakian operations to local retailer Condorum for an undisclosed sum.

The company operates 24 stores in the market, where it generated net sales of EUR159m (US$214.1m) last year. That represents approximately 10% of Ahold's European sales outside its domestic market.

Petercam analyst Fernand de Boer told just-food the move "does not come as a surprise" given the company's small scale in the country.

"Ahold carefully reviewed its strategic options and decided to sell the business as it has a limited market position in Slovakia," the company said in a statement today (14 November). "An exit from this country enables management to focus on its continued successful improvement of the Czech Republic business where the company operates 283 Albert stores, with 2012 net sales of EUR1.76bn."

According to Patrick Roquas, an analyst at Rabobank, the move should also feed through to improved margins at its European business. "These activities were loss-making, implying that the EBIT margin for other Europe will trend towards the 2% level," he suggested.

The Slovacian activities were probably sold for a "modest loss", Roquas added. The company said the move would not have a material impact.

Shares in Ahold sank more than 5% today, after the group flagged pressure on its market share in the Netherlands in its third-quarter trading update