Bahamas Supermarkets Limited (BSL), principal owners of the City Market food stores, has announced the agreement of a memorandum of understanding for the sale of its 77.762 percent shareholding in Bahamas Supermarkets Limited (BSL) to Associated Grocers of The Bahamas Limited (AGBL).
This move creates uncertainty as to the future of employees at the beleagured food retailer.
The company has eight stores in New Providence and three in Grand Bahama. It employs about 750 people.
“It does not matter to me who buys the company at this stage, once the individuals and entity are bona fide and legal. The important issue is the saving of Bahamian jobs for the loyal employees of this company and a return to the kind of company that supplies quality merchandise at affordable prices with an adequate supply chain,” said Fox Hill MP Fred Mitchell, whose concern abut the future of the employees has been made public.
The BSL sale, which is subject to regulatory approval, is expected to close on or before November 5, the company said in its statement.
Union chiefs have expressed their concern. Elgin Douglas, president of the Bahamas Commercial Stores and Warehouse Workers Union (BCSWWU), said yesterday that he has fears about the future of workers at the company.
Are the workers part of the problem though?
In August, 2010, the Tribune reported that the troubled supermarket chain was continuing to incur “substantial” costs as a result of inventory ‘shrink’ levels that are running three times’ ahead of international industry norms.
“We know that ‘shrink’ should be in the range of 2 per cent or lower, but our ‘shrink’ size is about 6 per cent of sales. The cost to the company is substantial,” Mr Winford told the Tribune at that time.
Others are concerned about the commitment of the new buyers. Is this new group, Associated Grocers of The Bahamas Limited, related to Associated Grocers of Florida? Does the company have anything to do with West End and Bimini MP Obie Wilchcombe and former Senator Pleasant Bridgewater, who own Universal Distributors Bahamas Limited.
In June, 2006, the All Business website, reported that Associated Grocers of Florida, with much fanfare, had signed an $8 Million deal for warehouse space in the Bahamas:
“Associated Grocers of Florida and the Grand Bahama Port Authority Limited (GBPA) signed an $8 million deal on Monday for an international wholesale distribution warehouse in Freeport, Bahamas. Associated Grocers, a retailer-owned wholesaler, will use the 100,000-square-foot warehouse to sell food, general merchandise, and health and beauty care products. Calvin Miller, president and CEO of Associated Grocers of Florida said company officials expect to break ground for the warehouse in 60 to 180 days.”
But in 2008, the grand plans of Associated Grocers went south, allegedly after its Florida-based operation learned of their intention to do business in Grand Bahama, where they would benefit from tax-free advantages.
The Florida-based group subsequently decided it was no longer necessary to do business in The Bahamas.
The building was apparently then rented by Obie Wilchombe and and Pleasant Bridegwater, who have had nothing but financial difficulties.
In September, 2009, Wilchcombe and Bridgewater were served with an eviction notice by the landlords of the International Distributors Building that their company leases.
Meanhwile, City Market has been desperate to save itself by getting bought out, by anyone, it seems.
Rumours have circulated about City Market’s intentions with each week bringing news about the company being purchased by a different buyer.
On October 27, the Tribune reported that talks Abaco Markets Limited (AML) and City Markets over a deal that would have seen AML acquire some or all of the struggling supermarket chain’s assets broke down.
There was also speculation that Bahamas Food Services might be interested, although that company has enough on its plate with the recent merger/acquisition of Prime Bahamas.
Some in the business community expressed concern about a food wholesaler operating in the retail environemnt.
In September, City Markets posted a $7.431 million net loss for the year to June 30, 2010, a 22.4 per cent increase over the previous year’s loss of $6.069 million.
The company, maybe in an attempt to save money, had an inexperienced advertising wannabe handling their marketing.
The young woman was in way over her head and did nothing to reverse the declining image of the food store to Bahamian consumers. Like so many “marketing experts” in the Bahamas, the foreign-born woman seemed to spend most of her time trying to figure out ways to make money for herself, rather than making money for the company.
Is the government so desperate to save the food chain and the jobs, that they will approve the sale of the company to anybody, or will due dilligence be applied and the future of City Markets and their employees made secure?