MADRID, Aug 24 (Reuters) - Shares in Spanish discount supermarket chain DIA jumped on Friday after the company said a new CEO will lead a shift in its strategy as it looks to reverse disappointing results and tackle fierce competition in its local market.
Antonio Coto, a veteran of the company who launched its Argentinian business 20 years ago, will replace Ricardo Curras at the head of the company in Iberia, one month after it cut earnings guidance for 2018.
Competition has intensified in the Spanish market from local heavyweight Mercadona and low-cost rivals such as Lidl and Aldi. DIA gained ground during the long economic crisis but has not been able to shift its strategy as the economy gradually recovered, leaving Spaniards with more money in their pockets.
“Retail business is quickly changing all around the world, and we should pick up the pace. The board asked for a change at the top of the company,” a DIA spokeswoman said.
“We are working on a new strategic plan and the new CEO will lead it.”
DIA shares rose 4.5 per cent, leading the Ibex-35, before settling at 2.11 euros ($2.41), 3.7 percent up on the day. The group has lost more than 70 per cent of its market value since a 2015 peak.
In a recent report, Caixabank analysts said they expected the company to aim to increase sales and focus on its higher-end La Plaza supermarkets, which have been performing better.
Russian investor Mikhail Fridman’s LetterOne, DIA’s main shareholder, supported the change in top management, the spokeswoman said.
LetterOne bought 25 per cent of the company at the beginning of the year, and named two board members a month later.
“We want to enter a new stage,” added the spokeswoman. ($1 = 0.8744 euros) (Reporting by Andrés González, editing by Isla Binnie and Kirsten Donovan)