Following the Mega supermarket chain's gloomy financial statements, which included a NIS 154 million operating loss, a 40% drop in sales, a going concern warning, and significant personnel cuts in the last quarter, Mega CEO Raviv Brookmayer said today that the Israeli supermarket chain would have to lay of hundreds of the company's employees.
In an interview today with "Globes" editor Hagai Golan on Radio 103FM, Brookmayer said that the chain "needs and wants to reach agreements with the workers committee concerning the expected layoffs, and to make it clear to them that in order to concentrate on keeping the 3,500 employees still working for us, we'll have to say goodbye to hundreds of employees. I want to say that we're not there yet - let's wait a little more.
According to Brookmayer, "The reports show the heart of our crisis. We went to court to ask for protection against the creditors at the end of June, and the reports reflect the three tough months we have just gone through. We're still optimistic, however, and we think that the additional cost-cutting measures we'll take will bring this great ship to a safe harbor."
Hagai Golan: The sales figures show that the public is staying away from Mega.
Brookmayer: "That's a result of the 32 branches we closed down. The decline in same store sales was 15%, and 7% in customers. That's a number we can live with. It's obvious that we need to make a great effort to get our customers back, and we're taking another measure to exit the discount sphere that is causing us large losses."
Brookmayer added, "We're in the midst of a rescue operation for a large organization in which we have to say farewell to our less successful parts. Our competitors are also suffering from the same problems. We have strong cards - we have Mega Ba'ir, we have the workers, we'll get the suppliers to go back to working with us, so that we'll be able to set up a good network inside the city. We were able to bring back our customers for many years, and there's no reason why we can't do it here again."
Will the Mega chain still exist?
"I get up and fight every day. The easiest thing to do is to give up. As long as we have strong cards in our hand, we have to try to use them to win. I tell myself and my friends in the company not to despair. Let's buckle down and win. Mega is important to the market for the level of competition and consumer prices, preserving the jobs of thousands of workers, and the suppliers who need a strong Mega."
Published by Globes [online], Israel business news - www.globes-online.com - on December 1, 2015
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