Hemköp and Spar form single chain - Hemköp doubles number of stores

Hemköp and Spar form single chain - Hemköp doubles number of stores The Board of Directors of Axfood AB have made the decision to merge the Hemköp and Spar chains. The decision entails that a new chain, which will be called Hemköp, will have approximately 200 stores and annual sales of approximately SEK 10 billion. Synergy gains are estimated to amount to SEK 60-80 m over a three-year period. The competition for traditional grocery stores in Sweden has intensified considerably in recent years, with discounters and hypermarkets capturing market shares. Axfood has an approximate 22% market share in the "traditional grocery store" segment, although this share is divided among several brands. "We are now combining three brands - Hemköp, Billhälls and Spar - under a single brand name. This will give us better opportunities for growth and development," says Mats Jansson, President and CEO of Axfood AB. "We see clear coordination benefits that can be gained with respect to revenues and well as expenses. The new Hemköp will have a considerably stronger foundation to stand on with twice as many stores. We see the fact that half of the stores will be run by private merchants as a strength. It is an excellent way to combine the benefits of chain operation with entrepreneurial drive." Conversion of Spar stores will commence in October 2004 and is expected to be completed by year-end 2005. Expenditures on the switch of signs and furnishings are estimated at SEK 30 m. Synergy gains are expected to amount to SEK 60-80 m over a three-year period. The new chain currently has a number of large stores. These will acquire their own format within the chain along with the new Hemköp name. This will enable these stores to have their own marketing and own customer offerings. The local Gothenburg chain, Billhälls, among others, will be included in the new bigger format. Today a total of 80 people work at Spar's and Hemköp's respective head offices. The new organization, which is expected to take effect on 1 July this year, will have approximately 50 employees, entailing the elimination of 30 positions. Spar's office in Gothenburg will be closed by 1 October of this year at the latest. Negotiations have been initiated. Carl-Erik Möller, currently President of Hemköpskedjan AB, will serve as President of the new chain. "We have now begun the build-up of a grocery chain that will be one of the best in Sweden," says Möller. "We aim to serve the many consumers who have a culinary interest in food. Due to the new chain's size, we will be able to offer attractive prices as well as the best foods - in terms of quality as well as new trends." For further information, please contact: Mats Jansson, President and CEO, Axfood AB, tel. +46-8-553 99 810 Carl-Erik Möller, President, Hemköp, tel. +46-8-553 99 901, +46-705-47 94 06 Kenneth Wall, Communications Manager, Axfood AB, tel. +46-703-124 122 Axfood AB is a retail food group comprising the wholly owned store chains Hemköp, Willys and Willys hemma and wholesale operations through Dagab and Axfood Närlivs. Additionally, Axfood works with a large number of independent merchants who are tied to Axfood by franchising or other agreements. In all the Group comprises some 500 stores in Sweden, of which about 220 are wholly or partly owned. Consolidated annual sales are approximately SEK 33 billion, with approximately 8,600 employees. Axfood has approximately 290 stores in Finland, of which 80 are wholly owned and the remainder are operated by independent merchants. Axfood has a market share of 18% in Sweden and approximately 8% in Finland, making it one of the largest, listed retail food groups in the Nordic region. The company is listed on the Stockholm Stock Exchange 0-List, Attract 40. Axel Johnson AB is the principal owner with approximately 45% of the shares. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2004/04/23/20040422BIT21440/wkr0006.pdf The entire release