Logo of Fawaz Abdulaziz Alhokair Co. (Cenomi Retail)
Fawaz Abdulaziz Alhokair Co. (Cenomi Retail) announced today, April 3, an additional significant phase of brand divestments as part of its ongoing turnaround strategy.
These brands are in addition to the already announced 21 brands, Cenomi Retail said, expecting the sale of these brands to close in 2024.
As part of its turnaround strategy, Cenomi Retail will focus on the core categories of fashion as well as food and beverage. Within the fashion category, the Inditex portfolio, including Zara and other Tier 1 fashion brands, will remain core strategic brands as they are key drivers of sales and EBITDA for the company, according to the statement.
Strategically, the company will continue to expand and enhance the offerings of Cinnabon, Subway, and Jamba, given the forecast growth of this category within the region.
The ongoing brand divestment program is a key pillar in improving the financial performance of the business while protecting topline sales, the statement added.
After careful consideration by both the Cenomi Retail board and executive management team, the non-core brands that will form part of the Phase 3 sale will include Aleph, KIKO, Decathlon, and Flying Tiger Copenhagen. Further brands will be announced over the coming months, said the company.
It also said that the phase 3 brand divestment is targeted to raise SAR 650 million of proceeds and will create additional operational efficiencies and is expected to close during the 2024 financial year.
Salim Fakhouri, Acting Chief Executive Officer, said: “As we come to the end of Q1 2024, the Cenomi Retail business has completed or is approaching completion of the sale of 21 brands for an aggregate price of circa SAR 360 million (including estimated inventory consideration) with corresponding operational efficiencies."
"As part of our continued transformation strategy, a further 18 brands have been identified for either sale or exit and will deliver more than SAR 650 million of proceeds and further improve core profitability of the business," Fakhouri added.
He went on to say that the Phase 3 brand sales has already received approval from the board and the executive management team are in the process of executing to close during this financial year.
At the completion of the brand sale program, the operating portfolio for Cenomi Retail will have reduced from 75 brands to a core portfolio of 13 brands, according to the company.
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