Friday, September 10, 2010

Buyers circle City Markets' Freeport stores


Tribune Business Editor
Freeport, Grand Bahama-City Markets has received offers to acquire/take over all or some of its three Grand Bahama-based stores, including an approach from Sawyer's Fresh Market over its Eight Mile Rock outlet, but the listed supermarket chain's chief executive told Tribune Business that "nothing is signed or concluded" in terms of any deal.

Derek Winford confirmed Tribune Business's previous exclusive revelation of Sawyer's Fresh Market's interest in City Markets' Eight Mile Rock store, but denied that any agreement for the rival grocery/food retailer to take it over had been reached.

Explaining that the numerous approaches from potential buyers had been sparked by City Markets' recent financial woes, and the perception that the Freeport stores were difficult to manage being on a different island to the company's Nassau-based headquarters, Mr Winford said he planned to "beef up management" on Grand Bahama in the hope this would dissuade interested suitors.

"In Freeport, we've been approached by a number of people, but nothing is signed, nothing is concluded," he told Tribune Business. "We've had offers for the downtown store and the Lucaya store, we've had offers for the Eight Mile Rock Store, and had offers for all three stores.

"Sawyer's did approach us, but many people have approached us. People are offering us money for the Freeport stores. That's just the business. They see you appear to not be doing well, and say: 'Let me get it off your hands'."

Mr Winford said City Markets and its immediate parent, Bahamas Supermarkets, planned "to protect the interests of our workers ourselves, which is why we're looking at beefing up management.

"I want to beef up management in Freeport, and then maybe people will stop approaching us," he added.

Tribune Business reported yesterday how City Markets appeared to be stemming the bleeding that left the company with an accumulated deficit of $16.805 million as at year-end June 30, 2010, its fourth quarter loss for that financial year having come in at $873,000.

Still, the 11-store supermarket chain posted a $7.431 million net loss for its 2010 financial year, a 22.4 per cent increase over the previous year's $6.069 million loss, although nowhere near as bad as the $13.5 million plunge into the red for 2008. The company's balance sheet position appears to be changing little, though, with cash on hand only increasing by almost $8,000 during the year to $59,024, indicating the firm still has to spend most of what it earns and can put little aside in reserve.

Accounts payables, which represents sums owed to creditors such as suppliers in the Bahamian wholesale industry, reduced narrowly over the year, falling to $10.541 million as at the 2010 year-end, compared to $10.867 million the year before. Mr Winford emphasised to Tribune Business that while City Markets had re-started its direct import programme, the company wanted to work with Bahamas-based suppliers, especially if they could match direct import prices.

"We'd prefer to keep the business with local suppliers is possible," Mr Winford told Tribune Business. "If they're able to match the imports, we'd prefer to work with the local guys."

He added that City Markets sales were "as expected for this time of year, which a tough time of year, apart from the Back-to-School blip. This is the worst period for retail. July, August, September is a tough time to get through; the toughest time for is. Everything is very tight at this time".

Mr Winford also told Tribune Business that the fact more than $1 billion in Bahamian commercial banks loans were over 30 days past due "doesn't make me very encouraged".

"That's money taken away from retailers, and we have 700 jobs to protect. We want that money to come into the store," he added. Despite City Markets' travails over the past three years, and the depressed economy, Mr Winford sounded an upbeat note for the 22 per cent minority Bahamian shareholders. He said: "We keep making things better and better.

"We're making progress. There's no question better times are ahead."

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