A preliminary study has confirmed the feasibility of turning privately owned Slovenian retailer Tuš into a cooperative within ten years.
The study could influence a decision to restructure the indebted retailer, according to Slovenian Minister of Economic Development and Technology, Zdravko Počivalšek.
The proposal would see up to 200,000 consumers joining the cooperative, or the equivalent of about a third of Tuš's current loyalty-card holders. Significant concessions would be required from banks and suppliers, but the plan could allow for the continued operation of Tuš. This is also of key importance for the local economy, as the company is one of the leading buyers of Slovenian products.
Minister Počivalšek expressed confidence that banks would support the retailer's transformation into a cooperative, pointing out that they will get more this way than if Tuš were forced into bankruptcy. He added that the next step would be to undertake an in-depth economic study.
Some local market analysts are skeptical, as the planned transformation could be regarded as indirect state aid. Also, the company’s position is further complicated by the fact that, by the end of this month, it must reschedule its loan obligations for a third time.
The financial problems at Slovenia’s third-largest retailer are due to excessive expansion and large credit exposures, with debts to banks estimated at €370 million and debts to suppliers around €130 million. As a result of increased competition, Tuš's stake in the Slovenian retail market has dropped to about 11 per cent, with approximately 350 stores.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. To subscribe to ESM: The European Supermarket Magazine, click here.