Blue Square-Israel, one of Israel’s largest retailers, has reported a loss in the fourth quarter due to declining sales and write-downs as a result of domestic recession and increased competition.
Blue Square posted a net loss of NIS99.2m (US$21.1m) after charges, compared with net income of NIS29.3m in the fourth quarter of 2001.
The company’s revenues fell 8% to NIS1.33bn from NIS1.44bn a year earlier.
Blue Square said its same-store sales for the fourth quarter fell 11.7% because of the recession.
The retailer said it recorded a charge of NIS161m before taxes in the fourth quarter, largely due to the effect of Israel’s recession on the value of some of its assets and provisions related to the closure of underperforming stores.
“The substantial write-downs taken during the fourth quarter reflect the economic consequences of a market plagued by ongoing recession and two years of the difficult security situation,” president and chief executive Yoram Dar said in a statement.
“This has reduced prevailing real-estate prices and brought about a market-wide consumer shift towards hard discount formats, impairing the value of some of our assets,” he said. “However, given our profits from the first three quarters, we were able to absorb the charge and post a small profit for the year.”
For the full year 2002, Blue Square recorded net profit of NIS7.4m, compared with net profit of NIS153.7m in 2001.
Sales in 2002 slipped 6.6% to NIS5.5bn.