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Croatia's Agrokor to close shops, cut jobs in retail chain
June 21, 2017 / 1:55 PM / 3 months ago

Croatia's Agrokor to close shops, cut jobs in retail chain

ZAGREB, June 21 (Reuters) - Indebted Croatian food producer and retailer Agrokor plans to reduce the number of shops run by its retail chain Konzum and lay off workers, a senior manager said on Wednesday.

“We plan to close down at between 80 and 100 shops and to cut some jobs. We must be profitable,” Konzum’s Chief Executive Slavko Ledic said during a visit to a newly opened store on the Adriatic island of Brac.

He did not specify the number of jobs that would be cut, but said some staff would be transferred to work at other locations.

Agrokor, the biggest employer in the Balkans with about 60,000 staff, was put under state management in April after it built up debts that amounted to at least 40.4 billion kuna ($6 billion) during a rapid expansion in the region.

Konzum currently runs around 700 stores across Croatia. Its revenues fell almost 11 percent year-on-year in the first five months of 2017.

“I think the worst is behind us. Now we must do everything to improve (Konzum‘s) results and profitability which we will have in focus in the rest of the year,” Agrokor’s government-appointed crisis manager Ante Ramljak said. He added Konzum would also work on opening new stores.

According to the crisis management team, a restructuring plan could be ready later this year which may include a sale or a change in ownership of profitable group companies, pending a deal with creditors.

The creditors include Agrokor’s bondholders, suppliers and banks, with the latter including several Croatian banks and the two biggest Russian banks, Sberbank and VTB

Last month, Agrokor secured a 480 million euro ($535 million) loan, giving a boost to Ramljak’s efforts to stabilise Agrokor and its businesses.

($1 = 6.6535 kuna)

$1 = 0.8977 euros Reporting by Igor Ilic; Editing by Mark Potter

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