By SIMON HENDERY retail writer
The Farmers department store chain is up for sale with owner Foodland Associated "evaluating the various alternatives" to dispose of its only non-food business.
Foodland managing director Trevor Coates said yesterday his Perth-based company was carrying out a strategic review of the 64-store Farmers chain.
"It may
well be that divesting Farmers will provide a clearer focus and direction for both Foodland and Farmers to the advantage to all stakeholders," he said.
Foodland has hired financial advisers ABN Amro to help evaluate the options, he said.
Foodland owns New Zealand supermarket group Progressive Enterprises which it expanded last year through the $690 million purchase of Woolworths NZ.
The Perth-based company runs the Action supermarket group in Australia and is that country's third largest supermarket operator.
Farmers has undergone a revamp of image, a management shake-up and a return to profitability under chief executive Nick Lowe who has headed the company since 2001.
Coates said the company's half-year results, to be released on Thursday, would show that Farmers was continuing to trade well.
The business, which includes consumer finance wing Retail Financial Services, has assets worth more than $300 million.
Lowe said yesterday it would be business as usual as he and his staff continued to develop the business.
Asked if he would be interested in taking a stake in the company himself, Lowe said it would be inappropriate for him speculate on the eventual outcome of the review process.
Industry insiders suggested that listed retailer Pacific Retail Group was the local business most likely to be interested in buying Farmers.
PRG chief executive Peter Halkett declined to comment last night saying he had just returned from travelling overseas and had not seen Foodland's announcement.
Briscoe Group managing director Rod Duke said: "We would look at anything but right now it's way too early to say whether or not we would have any interest."
Warehouse chief executive Greg Muir said his company was not interested in Farmers, "and in any event, unless we were just taking it for the [store] sites, I think the Commerce Commission would have have concerns about owning that business".
