Ja­maican Teas sells su­per­mar­ket outlet

Jamaica Gleaner - - BUSINESS - Tameka Gordon Busi­ness Re­porter tameka.gordon@glean­erjm.com

JA­MAICAN TEAS is about to dis­pose of its loss-mak­ing re­tail hold­ing, the Shop­pers Delite outlet based in West­more­land, the sale of which should be fi­nalised by month end, ac­cord­ing to CEO John Mah­food.

Bay City Foods, an­other su­per­mar­ket in which Ja­maican Teas has a 49 per cent stake, will also likely be sold next year when the lease on the space it oc­cu­pies ex­pires, Mah­food told Gleaner Busi­ness.

“What we are find­ing is that be­cause we are a rel­a­tively small com­pany and some of the busi­nesses are out of town and re­quire man­age­ment time and su­per­vi­sion, it’s not so easy. We felt that we would cut back on the re­tail side for more cen­tralise type of ac­tiv­i­ties,” he said.

Ja­maican Teas is pri­mar­ily a bev­er­age com­pany, but its hold­ings also in­clude gro­cery as­sets as well as real es­tate.

Ja­maican Teas bought the West­more­land-based Shop­pers Delite four years ago, but it has con­tin­u­ously weighed on the com­pany.

“We are sell­ing the fixed as­sets and the in­ven­tory,” he said. The gro­cery out­fit op­er­ates from rented space. For the 2015 fi­nan­cial year, Ja­maican Teas’ re­tail seg­ment posted losses amount­ing to $10.7 mil­lion, but this was a much bet­ter out­come than 2014 when the seg­ment took a $25 mil­lion hit. Mah­food now says that since 2016, Shop­pers Delite has shown signs of a turn­around. “That par­tic­u­lar store was bought in 2012. It lost money for a num­ber of years but it is ac­tu­ally (now) mak­ing a small profit,” he said. An­other Shop­pers Delite hold­ing in Kingston has con­sis­tently per­formed for the com­pany and will be kept amid the re­shap­ing of Ja­maican Teas’ core fo­cus, Mah­food said. “We are keep­ing the one in Kingston be­cause it’s very prof­itable and it’s close to us,” he said, not­ing that the prox­im­ity made it eas­ier to su­per­vise the busi­ness.

Mah­food pre­vi­ously dis­closed that in­ven­tory theft has been a ma­jor bur­den on the com­pany’s re­tail op­er­a­tions over the years.

IM­PROVED RE­SULTS

He was mum on the sale price for the West­more­land store, say­ing only that the com­pany’s op­er­at­ing re­sults “will see im­prove­ment as a re­sult of th­ese ac­tions”.

“The thought be­hind the sale is not so much the pro­ceeds. We want to fo­cus our at­ten­tion more to­wards the tea busi­ness and, to some ex­tent, the real es­tate de­vel­op­ment and com­mer­cial rental,” he added.

Group sales for the third quar­ter end­ing June 30, 2016 stood at $363.2 mil­lion, or 12 per cent more than the cor­re­spond­ing quar­ter.

Lo­cal sales of Ja­maican Teas prod­ucts grew 24 per cent for the re­view while ex­port sales de­clined two per cent.

The growth was at­trib­uted to both ex­ports and lo­cal sales, the com­pany said in its third-quar­ter re­port to share­hold­ers.

“Sales in the fully owned su­per­mar­kets have seen re­spectable in­creases to date but the 50 per cent owned su­per­mar­ket in Mon­tego Bay re­mains a chal­lenge in a com­pet­i­tive en­vi­ron­ment,” the com­pany said.

Su­per­mar­ket sales were also up 10 per cent for the quar­ter, it said. John Mah­food, CEO of Ja­maican Teas Lim­ited.

wishes to ad­vise that is no longer em­ployed to the Com­pany

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