Local TSC supermarket
bankrupt and out of business
Fails to attract three suitors
The local company that owns Kuwait-based supermarket chain Sultan Center (TSC) has been declared bankrupt by the court. TSC is exiting the local supermarket sector.
TSC had approximately $28 million in commercial debt, according to Firas Hamdan, Purchasing Manager at TSC.
“The company had been accumulating losses since it began local operations. Our rents have been very high,” he said.
The mother company kept sending funds to support the local branches. “The mother company now has financial problems and couldn’t support us anymore,” he said.
The management of the supermarket chain was in negotiations with other chains for a possible takeover.
TSC was approached by Al Makhazen (Coop), Bsat Supermarket, and Fahed Group. “None of the three suitors found the deal attractive,” the source said. Long before these three supermarkets contacted TSC, Spinneys had approached the chain seeking an acquisition, however that approach also failed.
“The success of the supermarket business relies greatly on the administration. If it is managed well, it won’t lose,” a source familiar with the issue, said.
According to Hamdan, a series of unfortunate events made things worse. “The parking areas in Zouk and Verdun were closed off by their owners. A Monoprix and BHV were open directly facing the Jnah branch.”
The chain is managed locally by Abdel Salam Bdeir and Firas Hamdan.
According to the same source, many small suppliers for who TSC was their biggest client, will go bankrupt if they do not get their money back.
Last year, TSC denied to businessnews.com.lb that it was withdrawing from the market and announced further expansion of its local branches.
The local company had around 300 employees in eight branches spread across Hamra, Zouk, Beirut Souks, Jnah, Jeita, Baabda, Ashrafieh, and Verdun. Employees have sought the help of the National Federation of Worker and Employee Trade Unions in Lebanon (FENASOL) to collect their salaries and compensation. TSC has failed to pay salaries for two months. The value of the compensation will be determined by the court, said Hamdan.
The company does not have any local assets. Its branches were leased and most of its merchandise sold. This makes it difficult for suppliers and employees to get their money back. Hamdan said, “TSC cut its operating expenses in the past two years by 40 percent. This included closing down losing branches and reducing maintenance costs. But it wasn’t enough.”
TSC, which has chains of supermarkets in Kuwait, Jordan, Oman and Bahrain, expanded to the local market in 2008 after acquiring the leases and inventories of Monoprix and Géant Casino chains of supermarkets from ADMIC for $131 million.
Reported by Yassmine Alieh
Date Posted: Nov 15, 2017