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April 2, 2014

FRANCE: Dia “mulls potential sale of French stores”

Spain-based discounter Dia has reportedly hired bankers to look at the potential sale of its operations in France.

By Dean Best

Spain-based discounter Dia has reportedly hired bankers to look at the potential sale of its operations in France.

Dia is mulling its options over its 865 stores in France, Bloomberg has reported, citing anonymous sources.

The retailer, created when it was spun out of Carrefour, could sell its business in France this year, the report said.

France is Dia’s second-largest market by store count. However, in 2013, the retailer closed 23 outlets in the country. Net sales there dropped 11.3% to EUR1.9bn (US$2.62bn). Dia’s group net sales increased 6% last year.

When Dia reported its results for 2013 in February, Inigo Egusquiza, a retail analyst at Kepler Cheuvreux, said margins from the retailer’s French unit had worsened in the latter part of the year – and speculated what the company could do with the business. A sale, Egusquiza argued, would not be simple.

“EBITDA margin dilution has accelerated – close to 200 basis points in Q4 – and an urgent solution is needed. Dia is mulling over various alternatives, from the full (seems tough) to a partial sale of Dia France, but this would not be easy in our view,” Equsguiza wrote.

Dia did not respond a request for comment when contacted by just-food yesterday (1 April).

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