July 20, 2017 / 12:17 PM / 2 months ago

Sligro to weigh partnership or sale options for EMTÉ stores

July 20 (Reuters) - Dutch food retail group Sligro said on Thursday it is weighing strategic options, including partnership deals and a sale, for its supermarket chain EMTÉ, which it says is too small to go it alone.

The announcement comes a couple of weeks after media reports that Dutch supermarket chain Jumbo was seeking to acquire EMTÉ, possibly in cooperation with supermarket chain Plus.

It also follows an investment in 2016 of 20 million euros to upgrade and expand the EMTÉ chain, which has a market share of 2.6 percent.

Sligro said its efforts to boost sales would take longer than expected to bear fruit. The supermarket chain reported 0.5 percent sales growth in the first half of the year of 2017.

“A potential partnership should prove itself on the short-term so that we can move forward. If that’s not feasible, we will move on to the sale option,” Sligro’s Finance Chief Rob van der Sluijs told Reuters.

“We received interest from almost every player in the Dutch market. We know everyone very well and we will start formal discussions after summer,” van der Sluijs added.

With about 130 stores in the Netherlands, EMTÉ contributed 827 million euros or about 30 percent of Sligro’s total net sales in 2016.

The business competes with Jumbo and Plus in the Netherlands as well as with market leader Albert Heijn, owned by Ahold Delhaize, and German discounters Aldi and Lidl.

“The future of the food retail remains uncertain, although it is clear that SFG (Sligro Food Group) will not maintain a standalone position. A partnership seems logic at this stage with Plus being the most likely partner,” analysts at Degroof Petercam wrote in a note to clients.

Though the poor performance of EMTÉ weighed, Sligro reported an 11 percent rise in first-half gross operating profit to 74 million euros ($85 million), helped by a strong performance at its food service business.

Sligro announced in May that it expects to sign a deal with Heineken to distribute cider and beer in the Netherlands -- potentially a 150 million euro boost to its food service business turnover per annum.

$1 = 0.8683 euros Reporting by Manon Jacob and Wout Vergauwen in Gdynia; Editing by Elaine Hardcastle

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