PARIS: Darty Plc, Europe’s third-largest electricals retailer by sales has agreed to sell its loss-making Turkish business and plans to buy a French retail website to boost online expansion, as it steps up efforts to revive the company.
Darty said yesterday that while market conditions remained challenging, it was confident its turnaround strategy would deliver higher earnings over the medium term, lifting its shares by 4.4 percent.
Like its larger rivals — Metro’s Media-Saturn and Dixons Retail —Darty is battling weak consumer spending and competition from online retailers.
London-listed Darty, which has more than 450 stores in Europe, has responded by cutting costs, exiting loss-making operations in Italy and Spain and focusing on its core markets of France, Belgium and the Netherlands.
Activist investor Knight Vinke, which owns 25 percent of Darty and has a seat on its board, has been pushing the company to accelerate the pace of change.
Darty’s shares have gained 86 percent so far this year, outperforming a 15 percent rise in the European retail sector index.
The company said on Wednesday it had agreed to sell its Turkish operations to local specialist technology retailer Bimeks.
Darty said it will sell its 28 stores but retain the business’s liabilities. Financial terms have yet to be agreed, but Darty said it expected the deal to be broadly cash neutral.
“While the Turkish market is growing and dynamic, we concluded that we could not expect to make significant progress with the business without making a further significant investment,” Darty Chairman Alan Parker said in a statement.
Reuters
