| To: Business Editor | For immediate release |
DAIRY FARM TO CLOSE REMAINING TAIWAN DRUGSTORES
15th December 1997 -- Dairy Farm International Holdings Limited, the international retailing and wholesaling group, today announced that the Company will close its remaining drugstore outlets in Taiwan by the end of January 1998.
The Taiwan drugstore chain, which operates under the name Mannings, had 59 stores at the end of 1996. Twenty under-performing stores were closed earlier this year and, following a recent review by the new management team in Taiwan, the decision was made to close the remaining stores. "Trading conditions remain difficult and, in the current economic climate, we do not believe that the chain can achieve an acceptable level of profitability," said Dairy Farm's new Regional Director for North Asia, Robert Neslund.
Mr Neslund said that in 1996 the Company's Taiwan drugstore business had incurred a loss of US$8 million on sales of some US$40 million and a similar loss is anticipated for 1997 on sharply declining sales. He said that Dairy Farm expects the closure costs to be charged in the 1997 Accounts would be US$14 million, some US$9 million of which relating to non-cash asset write-offs.
Mr Neslund said that the Company's Wellcome supermarket chain of 97 stores in Taiwan would be unaffected by the drugstore closures. He also confirmed that the new joint venture hypermarket business with Casino of France, which is in its pre-opening phase, continues to make progress towards its first store opening at the end of 1998.
Mr Neslund said that the business would cease operation by the end of January and that some 250 staff would be offered redundancy packages as appropriate. "We very much regret having to ask good staff to leave the Company, appreciate their efforts in a difficult market, and will ensure that the affected staff members will be treated fairly."
For other 1997 Business Developments, please see Notes to Editors attached.
For more information, please contact:
| Dairy Farm Management Services Limited Edouard Ettedgui/Robert Neslund |
(852) 2837-6481 |
| Ludgate Asia Limited Trish Harwood |
(852) 2543-5413 |
Full text of this announcement can be accessed through the Internet at
"http://www.irasia.com/listco/sg/dairyfarm" and is also available through "First Call".
Notes to Editors
1997 Business Developments
Dairy Farm is an international retailing and wholesaling group which focuses primarily on the Asia-Pacific Region, with additional interests in the United Kingdom. The Group operates some 1,500* outlets, principally supermarkets, convenience stores and drugstores, and its associates operate a further 1,300. The Group employs some 48,300* people and its associates a further 41,900. In 1996, Dairy Farm reported sales of US$7,000 million which, with its associates, totalled some US$12,800 million.
Since the arrival in June 1997 of Dairy Farm's new Managing Director, Ronald J Floto, further action has been taken to concentrate the Group's focus on its core retail activities in the Asia-Pacific Region and to improve the profitability of the overall business.
As part of a reorganisation of the Group announced in October, the management has been further strengthened with the most recent additions being Tim Lewis, Group Chief Information Officer; Robert Neslund, Regional Director, North Asia; John Pearl, Group Director, Human Resources; and Vijay Yajnik, Director, Specialty Companies.
In September, the Group's non-core manufacturing operations, a 49% shareholding in Nestle Dairy Farm, were sold to Nestle for US$40 million, thereby exiting the ice cream and chilled products manufacturing sector.
In October, Dairy Farm announced the sale of its Simago supermarket chain in Spain which the Company had acquired in 1990. Most recently, in December, the Company announced the closure of its remaining loss-making Mannings drugstores in Taiwan.
* These figures include Simago but do not include Mannings Taiwan.
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