Iceland cuts its losses by quitting overseas operations

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The Independent Online
ICELAND, the frozen food retailer, is cutting the losses from its foray overseas by closing its remaining four outlets, writes Heather Connon.

Bernard Leigh, finance director, said the group believed it would be a 'long, uphill struggle' to make profits in France, and had decided to abandon the effort now.

Losses in the current year - including shop closures and stock write-offs as well as trading - are unlikely to be higher than the pounds 1.5m incurred in 1993, Mr Leigh said. The pounds 3.9m cost of the acquisition of Au Gel - the platform for its French experiment - made in two tranches in 1991 and 1993 has already been written off.

Au Gel had 14 shops at its peak, but Iceland had always intended to trade from only three or four of them, closing the remainder. However, although customer research suggested that shoppers liked the Iceland offer, they were not buying enough frozen food to make a decent return.

Mr Leigh said he believed that reflected the difference between Britain and France. In France, even the market leader achieves only about pounds 9,000 to pounds 10,000 sales per shop per week - a quarter of that in Iceland's British stores.

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