Riyadh, Saudi Arabia, 3 April 2024: Cenomi Retail, Saudi Arabia’s pioneering retail brand partner, today announced an additional significant phase of brand divestments as part of its ongoing turnaround strategy. These brands are in addition to the already announced 21 brands and the expectation is that the sale of these brands will close during 2024.
As part of company’s turnaround strategy, Cenomi Retail will focus on the core categories of Fashion and F&B only. Within the fashion category, the Inditex portfolio including Zara and other Tier 1 fashion brands will remain core strategic brands as they are key drivers of sales and EBITDA for the company. Strategically Cenomi Retail will continue to expand and enhance the offerings of Cinnabon, Subway and Jamba given the forecast growth of this category within the region.
The ongoing brand divestment program is a key pillar in improving the financial performance of the business whilst protecting topline sales. After careful consideration by both the Cenomi Retail Board and Executive Management team, the non-core brands that will form part of the Phase 3 sale will include Aleph, KIKO, Decathlon and Flying Tiger Copenhagen. Further brands will be announced over the coming months.
The phase 3 brand divestment is targeted to raise SAR 650MN of proceeds and will create additional operational efficiencies and is expected to close during the 2024 financial year. This is a significant milestone for the company in undertaking an aggressive program of brand divestment, store closures and operational efficiencies to simplify the portfolio, improve profitability and clearly deliver on the turnaround strategy.
Salim Fakhouri, Acting Chief Executive Officer, commented: “As we come to the end of Q1 2024, the Cenomi Retail business has completed or is approaching completion of the sale of 21 brands for an aggregate price of circa SAR 360MN (including estimated inventory consideration) with corresponding operational efficiencies.
As part of our continued transformation strategy, a further 18 brands have been identified for either sale or exit and will deliver more than SAR 650MN of proceeds and further improve core profitability of the business.
The Phase 3 brand sales has already received approval from the Cenomi Retail Board and the Executive Management team are in the process of executing to close during this financial year.
At the completion of the brand sale program, the operating portfolio for Cenomi Retail will have reduced from 75 brands to a core portfolio of 13 brands. The exit of these non-core brands is critical in delivering on our turnaround strategy and will allow the company to focus on Tier 1 core strategic fashion and food & beverage brands to drive long term revenue growth and financial stability for the organization.’
