Belgian supermarket chain Delhaize said on March 26 its Delvita unit had agreed to buy 50 stores in the Czech Republic and Slovakia from Interkontakt Group (IKG), making it Slovakia's biggest supermarket operator.
Delhaize controls 100 percent of Delvita since it bought 11.5% earlier this month from the Perik family, who set up Delvita in partnership with Delhaize in 1991.
Delhaize plans to raise Delvita's capital in 1999 by 1.0 billion Czech crowns ($31.52 million) to finance the company's expansion and help make it profitable.
Amortisation and depreciation combined with financial charges from Delvita's expansion meant the unit posted a net loss of 98 million Belgian francs (2.4 million euros) in 1998.
"We have every confidence in (Delvita) making a net profit in 1999," Delhaize Chief Executive Pierre-Olivier Beckers told a news conference in Brussels. He said a lack of comparative figures for competitors in the Czech Republic meant it was impossible to say where Delvita ranked in the market, but it was among the top players.
Delhaize said that buying the 50 stores from IKG was part of its plan to rank in the top three food retailers in each of the 10 countries worldwide where it ran supermarkets. It did not say how much it paid for the stores.
Delvita already operates 15 stores in the Czech Republic and one in Slovakia, where it intends to open three or four more stores in 1999 in addition to the IKG locations, Delhaize spokesman Guy Elewaut said. Delhaize had chosen the 50 stores from IKG's portfolio of more than 100 locations because they were the most profitable.
IKG is the Czech Republic's biggest distributor in the food, textile and non-food sector.