Swiss retailer Migros puts Globus department stores up for sale
today Jun 28, 2019
Migros, Switzerland’s second-biggest retailer, wants to sell off its Globus department stores and Depot and Interio home furnishings businesses to focus more on core operations and online commerce, the cooperative company said on Thursday.
The company is also looking for new owners for its m-way electric bicycle business, it said after concluding there were few overlaps with its food retail operations.
Retailers in Switzerland have struggled in recent years, with the strong Swiss franc encouraging shoppers to cross the border into neighbouring Germany and France for their purchases. Economists expect tough conditions to continue in 2019.
“Our extensive analysis has shown that these businesses have better chances of success outside of the Migros Group,” Chief Executive Fabrice Zumbrunnen said in a statement.
Migros said it wanted to focus on supermarkets as well as expanding its convenience stores, digital sales channels and health operations.
Although Migros sales have held up in recent years, profitability has shrunk, with net profit plunging from 826 million Swiss francs (665 million pounds) in 2014 to 475 million francs last year.
Revenues at Globus, the group’s up-market department store, fell by 5.7% last year to 808 million francs, while Depot sales grew 2.5% to 554 million francs. This contrasted with a 14.2% jump in sales at Migros’s online retailer Galaxus last year.
M-way had 2018 sales of 40 million francs.
Migros said it would take some time for the sale process to progress and that no significant changes for staff or customers were expected in the meantime.
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