| To: Business Editor | For immediate release |
DAIRY FARM TO DISCONTINUE JAPAN SUPERMARKET VENTURE
5th February 1998 -- Dairy Farm International Holdings Limited, the international retailing and wholesaling group, today announced that the Company will discontinue its pilot Wellsave supermarket operation in Japan by the middle of 1998.
Wellsave is Dairy Farm's 60%-owned joint venture with Seiyu, one of Japan's leading retailers. The business presently operates fourteen supermarkets. Three of the supermarkets will close by the end of March and the company anticipates that the remainder will be closed by the middle of 1998.
When the Wellsave operation was first launched in September 1995 there was a perceived opportunity for discount supermarkets in Japan, operated in joint venture with a partner who could provide local market knowledge. "Since we first opened, a number of existing, conventional Japanese supermarkets have become aggressive low-cost promoters and have significantly weakened Wellsave's competitive advantage." said Dairy Farm's Regional Director for North Asia, Robert Neslund.
Mr Neslund said that Dairy Farm's share of the trading loss in 1997 was some US$9 million and, the business was generating a recurring monthly loss of some US$1.2 million. The total estimated closure costs are US$40 million, which includes the losses that would arise during the closure process. Dairy Farm is providing fully for its share of the closure costs of US$24 million in its 1997 results.
For further information please contact:
| Dairy Farm Management Services Limited Robert Neslund/Edouard Ettedgui |
(852) 2837-6481 (office) |
| Ludgate Asia Limited Martin Spurrier |
(852) 2543-5413 (office) |
This announcement can be accessed through the Internet at
"http://www.irasia.com/listco/sg/dairyfarm" and is also available through "First Call".
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 1,350* outlets, principally supermarkets, convenience stores and drugstores, and its associates operate a further 1,300. The Group employs some 44,000* 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 middle of 1997, the Group has significantly strengthened its operating management and has taken steps to focus on its core retail activities in the Asia Pacific Region. Recent disposals have included its joint venture food manufacturing interests and its Spanish supermarket chain. The decision was also taken to close its loss-making drugstore chain in Taiwan.
The primary share listing of the parent company, Dairy Farm International Holdings Limited, is in London and the bulk of its shares are traded in Singapore. The Company is incorporated in Bermuda, and its businesses are managed from Hong Kong by Dairy Farm Management Services Limited through regional offices in Asia, Australasia and Europe.
* These figures do not include Simago, Mannings Taiwan and Wellsave Japan.
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