20 MARCH 2002

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Still no sign of rescue for Price Club chain

By Ray Abdilla

The Price Club chain of supermarkets still remains closed months after the business crashed disastrously. Although the directors of the beleaguered company are hoping that a buyer will still materialise, they have twice watched negotiations with potential buyers waver and fail.

When the supermarket giant first began floundering, a number of companies expressed an interest in buying the Price Club, most notably Italian company Novacom and the Libyan business, Lafico. But although a number of meetings took place, no deals materialised.

The Price Club supermarkets have all closed gradually over the past months, most recently the last two that remained open at Attard and Burmarrad.

The Price Club giant owes some Lm8.5 million to over 200 creditors. In its heyday, it had boasted one of Malta's highest turnovers - some Lm22 million per annum. The chain's demise has been blamed on bad financing, management, and sway in retailing policy, which created anomalies in the supply chain.

On top of this, the information technology supporting the business when the new management took over three years ago was non-existent and investment had to be made in this area as well. Hence, the financial strain of these investments had a negative result on normal trading.

Although there was a sigh of relief when it appeared that Lafico might buy the supermarket giant, creditors were getting jittery about the length of time negotiations were taking and some eventually filed their claims in court.

The company is still hoping to hear from bidders from either Malta or abroad. Talks are also continuing between the directors, but insiders point out that the economic situation and the lack of business drive in the country is not helping in the search for a deal.

One of the company directors, Victor Zammit, told The Malta Financial and Business Times that the directors were always ready to discuss the supermarket chain’s future with interested parties.

 



Copyright © Network Publications Malta.
Editor: Saviour Balzan
The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07, Malta
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