City Market readjusts 2011 sales projections
City Market is wrapping up 2010 with new measures in place to grow its customer base back to earlier levels. One of those changes is a readjustment of its sales projections for 2011, said new CEO Mark Finlayson.
“Sales wise, the goal has come down,”said Finlayson, head of the Trans-Island Traders group, which recently bought a majority shareholding in Bahamas Supermarkets Ltd.”The earlier$120 million was based on having all stores, but now we’re being conservative.
“We’re looking more around the$100 million to$105 million level with those two stores closed.”
His comments follow the recent closing of the Oakes Field and Village Road locations, due to issues over entering new lease agreements with the landlords. City Market now has six locations in the New Providence and three in Grand Bahama. Finlayson said the company has had to take full account of where it was currently at, and some one-time expenses were being eyed which could cut into profit levels.
“We’re cash flow positive, but somethings we have to wite down related to the past,”he said.”So we can have a nice clean starting point for 2012… We have some paper hits we have to take[and]we want to take them in 2011, so that for 2011/2012 we will be able to start with a nice clean slate and cash flow and profits should be more in line.”
The company is also looking to open its twelfth location in Grand Bahama by summer 2011. Associated Bahamian Distillers and Brewers Limited’s old Butler and Sands location will house the store on that island.
This follows an especially troubling time for the company in that market, with inventory issues manifesting on the shelves in Freeport way before the problems became evident in the capital.
The intended projects both in Nassau and on Grand Bahama have kicked the original investment in the company up by about$10 million, Finlayson explained toGuardian Business, with the company now eyeing anywhere from$30 million to$35 million in spending to build it back up.
Trans-Island Traders completed the purchase of a 78 percent majority shareholding in the company from Trinidad’s Neal and Massy for just about$1 million, with an agreement to assume liabilities amounting to near$10 million.
“This whole thingstarted with the acquisition of BSL by Barbados Shipping and Trading(BS&T)and then BS&T became the subject of an acquisition by Neal and Massy,”he said.”When Neal and Massy bought BS&T, they had around 250 subsidiaries.
“Then there was an economic downturn, their CEO died[and]they had a lot on their plate at that period. They had a lot of fires they had to put out… and it all lined up for me and our group to purchase. But from their stand point, what I found out(is that)they are good investors overall.”
The City Market chain of supermarkets reported a$13.4 million loss in 2008 and a$6.069 million loss in 2009-and around$27 million in losses over the past four years-with the share price of the company declining from a high of over$16 in the last several years.
It was just three years ago when the company changed hands from the troubled U.S. grocery chain Winn-Dixie when it filed for bankruptcy–that company shedding its stake and BSL winning 3.9 million shares and a majority position in the company. The Bahamian investors were able to raise capital with an offering to local investors, moving to sell those shares over-the-counter through Fidelity Bank, its placement agent.