No decision on Franklins sale yet
SYDNEY, Australia (CNN) -- No decision has been made on the future sale of Australia's biggest discount retailer Franklins, Hong Kong-based owner Dairy Farm International said Monday.
There has been speculation Dairy Farm would sell off the under-performing Franklins unit to a buyer such as either of Australia's two largest general retailers, Coles Myer and Woolworths.
German grocer Aldi, which launches its first Australian store this week in Sydney, has also been mentioned as a potential buyer, as have Dutch retailer Royal Ahold, Britain's Tesco and US giant WalMart.
Citing the "highly competitive" nature of the industry, Dairy Farm said it would not discuss any of the strategic options it was considering, but confirmed that a final decision would likely be taken before the end of March.
Strategic options
"The issues the Group has been dealing with at Franklins have been recognised for more than two years, and continue to attract close executive attention. While a number of strategic options are being considered, no decision has yet been made," the company said in a statement issued late Monday in Hong Kong.
Dairy Farm, which is 53 per cent owned by the Jardines Group, is one of the largest food and drugstore retailers in the Asia-Pacific region, with 1999 sales of $6.8 billion and 78,000 staff in 2100 outlets. These are mainly supermarkets, hypermarkets, convenience stores and drugstores in Australia, New Zealand, China, Hong Kong, Taiwan, India, Malaysia, Singapore and Indonesia.
Woolworths chief executive Roger Corbett, releasing his company's strong first-half sales results in Sydney on Monday, said he would not rule out a bid for Franklins. Woolworths posted a 9 percent sales increase in the six months to December 2000 to reach A$11.2 billion ($6.2 billion).
On its website, Franklins claims a 13.6 percent share of total Australian supermarket sales. However, researchers suggest the figure may now be closer to 12 percent, with Woolworths at 37 per cent and Coles Myer holding 33 percent. The entry of Aldi this month is expected to add to the pressure for a shakeout in the Australian retail industry.
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