As Shufersal announces its own streamlining plan, Electra Consumer Products reports that it has executed an NIS 60 million streamlining plan for the Yeinot Bitan chain, in preparation for the launch of 40-50 Carrefour branches in the first half of 2023. The company estimates the plan’s implementation will be reflected in quarterly financials, which will show an NIS 50-60 million decrease in retail sales as well as in net profit
Nurit Kadosh 11/02/22 09:57AM
Conveniently timed just as Shufersal announces its own streamlining plan, Electra Consumer Products reports an NIS 60 million streamlining plan for the Yeinot Bitan chain.
During the third quarter, the company has executed streamlining and reorganization plans that include operational streamlining of branches and personnel, with the downsizing of about 300 employees, a decision to close 5 loss-making branches, terms-of-trade improvement, the construction of new branches and renovation of existing ones to convert them to the Carrefour format, and more.
According to management plans, Yeinot Bitan is preparing for accelerated conversion of branches, and for launching 40-50 Carrefour branches during the first half of 2023 to achieve nation-wide reach, as well as launching three Carrefour retail formats. Yeinot Bitan is working to complete store conversion by the end of 2023.
During the third quarter of 2022, Yeinot Bitan has already begun renovating branches and preparing them for the launch of Carrefour under temporary branding. To this date it has renovated and converted about 12 branches, and is planning to renovate and convert 8 more, so that by the end of the year it will have renovated and converted about 20 branches.
The renovations and conversions executed so far have helped to significantly improve the converted branches’ performance, even before their launch as Carrefour branches. This outcome supports Yeinot Bitan’s plans to accelerate the Carrefour chain launch to as early as 2023.
The company predicts that implementation of its streamlining and reorganization plan, including accelerated conversion of chain branches to the Carrefour format, will improve its capability to attain its food and beverage goals and business strategy, which may improve this sector’s EBITDA as of the fourth quarter of 2022 and increase revenue in converted stores. The company also estimates the plan will allow the effective launch of its credit cards club at around the same time as the Carrefour launch.
Based on the company’s analysis and evaluations as part of work on its third quarter financials, the Company estimates that this latest financial report will record a provision for the reorganization plan, including provisions for fixed-asset depreciation and others, which will reduce food and beverage retail sales by NIS 50-60 million in the third quarter of 2022. Electra Consumer Products estimates that recording this provision will decrease the company’s net profit and net profit attributable to shareholders in the quarterly financials by an estimated NIS 50-60 million and NIS 20-24 million, respectively.