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Attention K-mart shoppers: Tesco takes over

With the official takeover of their flagship Slovak store due to be completed by October's end, executives at Tesco, the U.K.'s largest supermarket chain, are already talking about opening more outlets in Slovakia.
Tesco's store in the Slovak capital will be the first of seven Slovak stores that the company bought from the American firm K-mart last March for $117.5 million to be completely outfitted with the Tesco name, company representatives announced at a reception in Bratislava on October 15. The "rebranding" of the other six stores, from the products on the shelves to the signs out front, will be complete by April, said Tesco's president and CEO, Sir Ian Maclaurin.

With the official takeover of their flagship Slovak store due to be completed by October's end, executives at Tesco, the U.K.'s largest supermarket chain, are already talking about opening more outlets in Slovakia.

Tesco's store in the Slovak capital will be the first of seven Slovak stores that the company bought from the American firm K-mart last March for $117.5 million to be completely outfitted with the Tesco name, company representatives announced at a reception in Bratislava on October 15.

The "rebranding" of the other six stores, from the products on the shelves to the signs out front, will be complete by April, said Tesco's president and CEO, Sir Ian Maclaurin.

A simultaneous effort to change the company's six new stores in the Czech Republic is also underway. In fact, the store in Brno was the first to shed its K-mart trappings; the six-week refitting, which cost Tesco a total of $1 million, ended on September 5 when the store re-opened. The Bratislava store is second in line, to be followed by Prague on November 1.

Expansion talk

Once the transfer is complete, Maclaurin told The Slovak Spectator, the firm will look towards opening more stores in Slovakia. "We would like to use the stores here as a base," from which to expand in the next couple of years, Maclaurin said. The process is already underway to analyze potential sites; Tesco officials said plans include the construction of an even larger "hypermarket" in Bratislava and a second store in Košice.

In the meantime, the focus will be on transforming the seven existing outlets into Tescos. The extent of physical improvements, which will continue over the next year or two, will vary from store to store, said Keith Brandon, CEO for Tesco's operations in the Czech and Slovak Republics. Other gradual changes will include an expansion of the produce section, the introduction of some foreign foods, and an emphasis on customer service. The size and composition of the staff should remain the same, Brandon added.

"We have no plans to have some sort of major upheaval because this was a successfully run business before," Brandon said. "[K-mart] was growing well in sales terms and making a small profit." The American chain dumped their Czech and Slovak stores, which registered $200 million in sales last year, to focus more on their slipping grip in the U.S. market.

Tesco - which also has purchased 45 Global stores in Hungary and 36 Slavia stores in Poland in the last two years - was looking to break into the Czech and Slovak Republics when K-mart put its operations on the block. "We were lucky that the stores came onto the market," Brandon said. "We had been looking for a year at possible acquisitions. K-mart was there at the right time."

Tesco's arrival on the Slovak scene, British Ambassador Peter Harborne said at the Embassy-hosted official announcement of the changeover, symbolizes growing U.K. interest in the region. Last year, British exports to Slovakia, the Czech Republic, Poland, Hungary and Slovenia soared by 35 percent.

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