Superquinn has offloaded six of its properties in a sale and leaseback deal that has netted its owners €142.5 million from Friends First F&C, writes Ciaran Hancock.
The Dublin-based fund manager has acquired the freehold on Superquinn's outlets in Swords, Bray, Walkinstown, Naas and Finglas. These are being rented back to Superquinn on long leases. The sixth store has not been named.
Superquinn plans to vacate the property in Walkinstown for a nearby site that it has acquired. The site would then be developed by Friends First.
The retailer is also looking at alternative sites in Naas for a replacement for its existing store. Its Finglas store is subject to a planning application that would include the building of apartments. The property in Bray is likely to be refurbished, with Superquinn committed to remaining at its outlet in Swords.
Simon Burke, Superquinn's chairman, said the company would use the funds to pay down its debt. Select Retail Holdings paid €420 million in 2005 to acquire Superquinn's 21 stores from Feargal Quinn and his family. "This allows us to restructure our debt and gives us the headroom to acquire new sites," Mr Burke said.
Superquinn said it achieved its first like-for-like sales growth in four years during the 12-month period to the end of April. Mr Burke said its total sales were €584 million last year, which represented a low single-digit increase in turnover.
"What we saw was a gradual acceleration in sales growth over the past 12 months, which makes us optimistic about sales prospects for the current year."
Mr Burke said the sales growth was aided by a new store design introduced in Blanchardstown and Lucan, which has been well received by customers.
Superquinn plans to refurbish five other stores and open three new outlets at a cost of €60 million by the end of April 2008.
A new 929sq m (10,000sq ft) supermarket will open on Tuesday in Rathborne, close to Ashtown railway station in west Dublin. This will be the first new shop opened by Select Retail Holdings, whose backers include Bernard McNamara and Jerry O'Reilly, since it took control.
A new Ranelagh store is due to open with a third, as yet, unidentified location also pencilled in for the current year. Stores at Ballinteer, Blackrock, Sutton, Knocklyon and Sundrive are due to be refurbished.
Mr Burke said he hopes to expand the chain to 35 stores by 2011. The expansion will be focused on the greater Dublin area. He expects the company to make an investment of €150 million in the retailer.
He said restructuring proposals, which involve redundancies, have been accepted by staff at its underperforming stores in Clonmel and Dundalk. As a result, no store closures are now envisaged.
