The Carrefour Israel retail chain, arrange by Electra Shopper Merchandise (TASE: ECP), continued to incur heavy losses in 2023. Electra Shopper Merchandise estimates, nevertheless, that the chain might change into worthwhile within the present quarter. Carrefour posted a lack of NIS 188 million final yr, following a lack of NIS 207 million in 2022.
Carrefour is operated by an organization known as World Retail, during which Electra Shopper Merchandise has a 48% stake, on which it made a NIS 67 million write down final yr. Carrefour’s losses led to Electra Shopper Merchandise posting a internet loss attributable to shareholders of NIS 101 million in 2023, which compares with a revenue of NIS 102 million in 2022.
World Retail’s income totaled NIS 3 billion final yr, 9.2% greater than within the earlier yr, however its gross revenue margin fell from 31.7% to 29% due to particular opening affords for Mega branches transformed to the Carrefour format. World Retail has to date launched 86 Carrefour branches.
Electra Shopper Merchandise itself posted a 5.3% rise in income final yr to NIS 6.5 billion, due to progress within the meals retailing sector. Due to the write-down of Carrefour, it made an working loss NIS 12.3 million, which compares with an working revenue of NIS 210 million in 2022.
One other retailing enterprise by Electra Shopper Merchandise, the launch of 7-Eleven comfort shops in Israel final yr, resulted in a lack of NIS 68 million. The chain now numbers eight shops in Israel, however the firm says that it’s finishing up “substantial closures.”
Electra Shopper Merchandise signed a franchise settlement for Israel in October 2021, and initially deliberate to open 30 7-Eleven shops across the nation, however in the long run it opened solely eight, all of them in Tel Aviv. The chain’s CEO, Avinoam Ben Moha, resigned in August final yr, apparently due to variations of opinion with Electra Shopper Merchandise senior administration.
Electra Shopper Merchandise CEO Zvika Shwimmer mentioned that the corporate had carried out “a number of strikes that strengthened the group’s monetary soundness and that may allow us to proceed to current progress in income and in operational metrics.” He talked about the funding by French firm PFH Group in Carrefour Israel alongside additional funding by Electra Shopper Merchandise, which he mentioned “led to the strengthening of Carrefour’s shareholders’ fairness by NIS 270 million”, and the restructuring of the chain.
“We proceed the method of changing branches of the chain and are at present in negotiations on extending leasing agreements for a big a part of its belongings. The deep streamlining and restoration course of at Carrefour, along with the in depth kashrut venture during which a whole lot of merchandise had been accredited, and the launch of our buyer membership, will make a really sturdy contribution to strengthening the group and to accelerating its progress because the main client merchandise group in Israel, and can allow us to open 2024 operationally and financially sturdy in all group corporations, and to current progress and profitability in the midst of the yr.”
Revealed by Globes, Israel enterprise information – en.globes.co.il – on March 26, 2024.
© Copyright of Globes Writer Itonut (1983) Ltd., 2024.
