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City Markets on Life Support

City MarketCity Markets is now considering closing two additional stores in New Providence, which would leave only two stores open.

The fortunes of the once powerful food store chain have spiralled downward for several years with the situation only getting worse since the company was taken over by new owners last year.

Trans-Island Traders, the supermaket chain’s 78 per cent majority shareholders, is headed by Mark Finlayson, whose lack of business experience was highlighted when he ran into severe problems while in charge of another once proud Bahamian retail giant, Solomon’s Mines.

Finlayson, who has already shuttered several stores, is now set to “temporarily” close the South Beach and Seagrapes Shopping Centre stores, presumably to address a $2.5 million refrigeration problem. He is reported to have said that he would reopen the stores by Christmas, 2011.

If Finlayson goes ahead with the closure of the stores, it would, as Neil Hartnell from the Tribunes said, “mark a remarkable transformation in the fortunes of a supermarket chain that, as recently as 2006, was a retail ‘powerhouse’, its then-12 stores churning out a regular $6-$7 million in annual net income.”

In all fairness to Mr Finlayson, many of the problems facing the company were inherited from the owners who preceded him. BSL Holdings had mismanaged the business to such an extent that the company posted a net loss of $28 million between the summer of 2006 to November, 2010.

Many customers have stopped shopping at City Market because the shelves in most stores are as bare as Old Mother Hubbard’s cupboards.

One reason for that is due to the fact that a number of wholesalers have stopped shipping to City Markets because the company has failed to make payments on its regular monthly accounts.  Collectively, wholesalers are owed millions of dollars in past due debt, despite providing very convenient payback arrangements for Mr Finlayson when he first took over the company.

In an interview with Mr Hartnell from the Tribune, Mr Finlayson made a thinly-veiled threat that, if he were to liquidate City Markets, the Bahamian wholesale industry would receive nothing because his family’s debt ranked ahead of theirs.

At least one wholesaler disagreed with that comment, saying that it probably wouldn’t work out the way Mr Finlayson says.

“If I was to liquidate, to date this company does not have enough money to pay the Finlaysons off. I was willing to work with them to save their businesses, along with this, but if they don’t understand and are not willing to work with us, they are back in the same position they were prior to us buying the company,” Finlayson told the Tribune.

Making a comeback even more difficult is the low moral of the staff, who fear losing their jobs and their pension money.

Bahamas Supermarkets’ latest financial report indicates that the company posted a $14 million operational loss for the past year, with a loss of around $3.305 million just during the three months leading to the end of June.

Posted in Business

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