| ||
| ||
| ||
 |
|
|
|||||||||||||||||||||||||||||||||||||||||||||
Coles overhaul targets profit leap
SYDNEY, Australia (CNN) -- Australia's biggest retailer Coles Myer says a transformation of its supply chain will help its profit goal of Aust. $800 million ($536 million) by 2006. Coles Myer, which competes fiercely with Woolworths for the bulk of Australia's consumer spending, last week posted a better than expected net profit of A$455 million for 2002-03. CEO John Fletcher said Thursday the company would invest more than A$600 million over the next five years in improving its supply chain. This would deliver benefits of A$425 million a year from 2007-08 onwards. The supply chain overhaul is part of a company transformation that includes information technology, organizational culture and customer loyalty programs. The company will cut its distribution centers from 41 to 24, and will use improved technology to reduce costs and streamline deliveries to stores. Fletcher said the changes were not about cutting jobs. "We are talking about growing not shrinking our business," he said. With annual sales of more than A$27 billion, Coles Myer is Australia's biggest retailer. But rival Woolworths posted a higher net profit for 2002-03, reporting a 16.5 percent profit lift last month to A$609.5 million on sales of A$26.3 billion. Coles Myer and Woolworths are locked in a long-running battle for retail supremacy. Both run supermarkets, liquor outlets and general merchandise stores, with Coles also having the Myer and Grace Bros department stores. Both also offer discount petrol to shoppers, with Woolworths well ahead in the number of sites it operates. Coles only began its discount program in July. The fuel offer is part of Fletcher's turnaround strategy for Coles Myer, following a bruising boardroom battle in 2002 that saw a key shareholder, Solomon Lew, voted off the board in November. Lew had been highly critical of the performance of Coles, particularly its Myer, Grace Bros and Target stores. Fletcher came to Coles Myer in September 2001 after six years at the top of logistics group Brambles. In a statement Thursday, Fletcher said spending on the transformation would be within the A$800 million to A$900 million in annual capital spending already flagged to the market. Coles shares are down about 2 percent into A$7.59 in Thursday afternoon trade. But they are up more than 20 percent so far this year. Shares in Woolworths are down 1.3 percent to A$11.51. It is up only 1 percent for the year. The broader market, measured by the S&P/ASX200, is down 1 percent Thursday, and is up 5.5 percent for the year.
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
|
