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Cenomi in brand merger talks with global fashion retailer

By Pramod Kumar
Accessories, Bag, Handbag Alamy via Reuters
Cenomi Retail announced the sale of 16 brands earlier this year to focus on what it called "champion brands" such as Zara

The Saudi Arabia-based franchiser Cenomi Retail is in talks with an unnamed international fashion retailer for a potential merger of some of its brands.

The investment bank Lazard has been appointed as financial advisor while AS&H Clifford Chance will take on the task of legal adviser, the Saudi-listed company said in a statement.

Updates on the talks will be given in due course, the company said.

Person, Electronics, Mobile Phone

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The stock closed 2 percent higher at SAR11.20 after the disclosure on Monday. The company’s shares have risen by nearly a quarter in the past week.

Last week Cenomi Retail appointed Salim Fakhouri as its CEO. He had been acting CEO since March this year.

As part of a turnaround strategy to stem mounting losses, Cenomi Retail sold 16 brands in the first quarter of 2024.

cenomi retailCenomi Retail
Salim Fakhouri was confirmed as CEO by Cenomi Retail last week

The retailer also transferred 226 stores in Saudi Arabia to Abdullah Al Othaim Fashion Company. The transfer came after its exit from some international markets and the net closure of 219 stores in 2023. 

The company’s board has already approved the sale of an additional five brands – Aldo, Aldo Accessories, Pedro, La Vie en Rose and Charles & Keith – and 121 stores to Abdullah Al Othaim Fashion Company in a deal worth SAR219 million ($58 million) plus inventory.

Cenomi Retail’s first-half 2024 retail revenues fell 11 percent year on year to SAR1.8 billion after it sold franchises for 19 brands in the kingdom, it announced this month. It turned in a loss of SAR71 million in the first six months of 2024, down from a profit of SAR112 million a year ago.

Net profit for the second quarter was down 52 percent year on year to SAR81 million.

The retailer’s accumulated losses stand at SAR1.5 billion as of June 30, 2024.

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