There is mounting speculation that the problems facing Dutch retailer Ahold may not be confined to its US Foodservice subsidiary, although chairman Henny de Ruiter yesterday [Wednesday] denied that the group was spiralling into bankruptcy.
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“I don’t believe that a takeover is the only means of rescuing Ahold,” he told Dutch television, further refuting suggestions that the company might sell its flagship domestic supermarket division Albert Heijn.
James L. Millar, the president of Ahold’s US Foodservice unit, which is being investigated after it emerged it overstated operating profits by at least US$500m over two years, sent customers a letter stating that the problems had been caused by “a few trusted employees” who had “let our company down”.
The letter has been interpreted as an attempt to calm customers’ fears, but an Ahold spokesman told Dow Jones Newswires that the letter had not been authorised by Ahold.
Meanwhile the company has pointed out that it had disclosed its sharp drop in cash flow in a November filing with the US Securities and Exchange Commission. The drop was attributed to problems with promotional payments, and left Q3 cash flow down nearly 50% from the previous year.
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By GlobalDataAhold today announced it would scrap $30bn of announced sales when it adjusts its accounts for joint ventures over the past three years, eliminating some 15% of overall revenues during this period.
On a somewhat brighter note, it is reported that Ahold will name its new chief executive officer within the next couple of weeks. The company has been seeking to recruit a successor to Cees van der Hoeven since he and CFO Michael Meurs resigned when the accounting irregularities in the US emerged last month.
