Skip to content Skip to Search
Skip navigation

Cenomi Retail to divest more brands in turnaround plan

Cenomi will reduce its number of stores from 1,000 to 367 following last year's losses Cenomi Retail
Cenomi will reduce its number of stores from 1,000 to 367 following last year's losses
  • Directors back fresh round of sales
  • Aims to raise $173m from deals
  • Focus on 13 ‘global champions’

Franchiser Cenomi Retail has announced another round of brand divestments as it seeks to tackle rising losses.

The Saudi company closed more than 200 stores last year and sold 16 brands in the first quarter of 2024. On Wednesday Cenomi Retail said its board of directors had approved the third phase of the sell-off.

The company aims to raise SAR650 million ($173 million) from the phase 3 sales, which are due to be completed during the 2024 financial year.

Cenomi, which had 75 brands in its portfolio before it began the divestment programme, said it would end up with just 13. It plans to focus on so-called “global champions” in the fashion and food and beverage sectors, such as Zara.  

The company added that it would expand the offerings of Cinnabon, Subway and Jamba on the back of forecasts of growth for the F&B sector.

The divestment programme – an important pillar in improving the financial performance of the business, which reported losses of more than SAR1 billion last year – will also reduce Cenomi’s footprint from more than 1,000 to 367 stores.

The non-core brands that will be sold in phase 3 include Aleph, Kiko, Decathlon and Flying Tiger Copenhagen. More will be announced over the coming months.

Salim Fakhouri, acting CEO, said: “As part of our continued transformation strategy, a further 18 brands have been identified for either sale or exit and will deliver more than SAR650 million of proceeds and further improve core profitability of the business.” 

“The exit of these non-core brands is critical in delivering on our turnaround strategy.”

Earlier this week the company said its 2023 revenues – SAR5.2 billion, a drop of 5 percent – had been affected by the closure of outlets. International retail revenues improved by nearly 8 percent to SAR1.1 billion on strong demand for its Inditex brands such as Zara, Pull & Bear and Bershka. 

Cenomi’s liabilities exceeded its assets by SAR3 billion at the end of 2023, prompting auditors to raise concerns in its latest financial results statement issued over the weekend. Accumulated losses also rose to SAR1.4 billion last year.

Cenomi’s struggles are in contrast to Saudi Arabia’s retail strength, according to analysts. The kingdom rose nine places to No 3 in the latest Global Retail Development Index, published by consultancy Kearney.

Debashish Mukherjee, a partner at Kearney and consumer and retail practice lead in the Middle East, said the kingdom was “at the forefront of retail’s next wave of growth”.

Latest articles

The UAE wants dialogue to address the ripple effects of geopolitical challenges on global trade

UAE to advance talks on debt sustainability at global event

The UAE’s finance ministry intends to advance discussions on global macroeconomic stability and debt sustainability at the 2024 Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG). The spring meetings will be held in Washington, D.C., from April 15 to 20. The UAE will also promote a dialogue to address […]

A woman buys cooking oil at a market in downtown Cairo, Egypt

EU to provide ‘urgent’ $1bn short-term aid to Egypt

The European Union (EU) will provide €1 billion ($1.1 billion) in urgent short-term financial aid to support Egypt’s economy. The funding is part of the larger €5 billion macro-financial assistance package.  The remaining €4 billion will be released as longer-term assistance over 2024-2027 but is yet to be cleared by the 27-member bloc. The aid […]

Adnoc sought advice from investment banks on buying a significant stake in BP, a media report said

UAE’s Adnoc explored acquiring BP

Abu Dhabi National Oil Company (Adnoc) explored the possibility of acquiring British oil major BP but abandoned the plan as it did not fit into its strategic growth objectives, a media report said.  The talks did not advance beyond the initial stages, Reuters reported, citing informed sources.  The UAE state oil company also sought advice […]

Nature, Undersea cables account for as much as 90 percent of Europe-Asia telecommunications, Water

Iraq and Kuwait team up for European telecom corridor

Iraq’s Informatics and Telecommunication Public Company, a division of the Ministry of Communications, has signed an agreement with Kuwait’s Zajil Telecom to create a telecommunications corridor from the Gulf region to Europe, transiting through Iraq and Turkey. The new route will pass through Iraqi sea and land ports. Iraq’s minister of communications Hayam Al-Yasiri said […]