Hong Kong-based Dairy Farm International Holdings Ltd, has said it hasn’t decided whether to sell its loss-making discount supermarket chain, Franklins, in Australia. Dairy Farm, responding to newspaper speculation have, said it will decide the future of its Franklins stores by the end of March.
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Australia’s Sydney Morning Herald newspaper reported that Dairy Farm agreed to sell its loss-making Franklins subsidiary in two large chunks.
The newspaper believes Coles Myer Ltd., Australia’s No. 2 retailer, agreed to buy 63 stores in Victoria state, while either US-based Wal-Mart Stores Inc. or Germany’s Aldi Group may buy the company’s 143 stores in New South Wales state. The Sydney Morning Herald did not reveal the source of its story.
A spokesman at Franklins denied that the company had been talking to Aldi. “We have continually denied that we are talking to Aldi and I would imagine that that is certainly the case as we speak,” said Russell Deeble. Meanwhile, Coles Myer wouldn’t comment on the report.
Dairy Farm, which operates supermarkets throughout Asia, lost US$51m in the first half ending June 30, partly because of poor performance at the Franklins unit.
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By GlobalDataAny sale of the Franklins chain to Coles Myer is likely to receive close scrutiny from anti-trust laws due to the concentrated nature of the Australian supermarket industry.
