|
Discount grocery store chain, REMA 1000, to open multiple outlets across the Czech Republic using EBRD finance
As part of its ongoing strategy to focus on small and medium-sized Czech operations, the European Bank for Reconstruction and Development (EBRD) will provide a CZK 400 million (ECU 11.8 million) loan for grocery store expansion to Rema 1000 IK a.s., a Czech joint-venture company. Up to 80 new discount grocery stores are to be established across the Czech Republic over the next two years, as part of a long-term investment programme set up with finance from the EBRD.
"This project will have a major impact on the Czech Republic's growing retail, discount food sector. Customers will be offered high-quality groceries at consistently low prices," said Igor Ocka, the EBRD's Resident Representative in Prague. "Through the franchise structure, the project encourages entrepreneurial activity and allows the EBRD to indirectly provide support for the development of small retail business in the country, particularly outside of Prague."
Rema intends to have a total of 110 stores in operation by the year 2000 offering between 1,500 and 2,000 varieties of popular groceries at discount prices. Spread across the Czech Republic, the stores will have an average size of 550 sq. metres and the majority will be located on the periphery of large Czech cities.
The proceeds of the EBRD loan will be used to finance the acquisition and refurbishment of existing stores, as well as construction of new outlets. Rema intends to train Czech store operators in management skills based on successful, western retail grocery operations. The franchisees will be selected from applicants deemed to be the most committed and entrepreneurial Czech candidates.
Rema 1000 is jointly owned by Interkontakt Group, a major Czech wholesale and retail group, and a group of investors headed by Reitangruppen, the Norwegian retail food franchise and master franchisor of the Rema 1000 concept. The total cost of the project is CZK 1.2 billion (ECU 31.9 million). The EBRD will fund 35 per cent of the project, while an additional 22 per cent will be provided by Zivnostenska banka a.s.
|
